Soybean Commentary
May Soybeans close 1 cent lower ($9.58), July 1 ½ cents lower ($9.68 ¾) and Nov¼ cent higher ($9.64 ¾)
May Meal closes $3.5 lower ($310.8), July $3.6 lower ($315.0) and Dec $2.3 lower ($316.6)
May Bean Oil closes 46 pts higher ($32.35), July 46 pts higher ($32.62) and Dec 47 pts higher ($33.13)
Soybean and soybean meal prices ran higher Monday night – faded to lower during the day session with meal prices being the weakest. Why these prices were higher Monday night is beyond me unless it was just some realignment of the inter-market spreads. Soybean oil got a boost during the day session as inter-market spreading (buying bean oil/selling bean meal) became quite evident. There is still the belief that tax credits for the bio-diesel manufacturers will eventually happen. The strength in bean oil was able to offset some of the meal weakness leaving soybeans with mixed closes; slightly easier upfront, fractionally better for the new crop.
Interior cash soybean prices ran mixed on the day. Like cash corn prices where flooding is an issue bids are lower as there is no place to go with them. Where flooding is not an issue bean bids stand in. The Gulf rolls to July and it suggests a 2-3 cent improvement. Not much happens within the old crop soybeans spreads. Old crop loses to the new crop. Interior cash meal prices run mixed but overall still looking soft. Meal spreads ran in tandem with the bean spreads; not much change within the old crop while old crop loses to the new crop.
Where is the soybean market going near term – nowhere fast if we continue to see rising bean oil prices vs. lower soybean meal prices. The technical look at soybeans shows a sideways to higher drift while totally lacking character. The meal market looks like a sideways affair as the recent triangulating price action appears to be on the verge of breaking down. Bean oil shows an interim double bottom dating back to mid-April. Today’s close over $32.50 (July) suggests a trendline test at the $33.25 level. I continue to note that the soybean volatility remains rather low – low volatility suggests a lack of uncertainty – a lack of uncertainty suggests sideways if not lower price action.
Daily Support & Resistance for 05/03
July Beans: $9.58 – $9.75
July Meal; $310.0 – $318.5
July Bn Oil: $32.25 – $33.10
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