Soybean Commentary
May Soybeans close 6 ¾ cents lower ($9.56 ¼), July 8 ¼ cents lower ($9.64 ¾) and Nov 5 ¼ cents lower ($9.61 ¼)
May Meal closes $2.8 lower ($309.5), July $3.3 lower ($313.6) and Dec $2.5 lower ($315.0)
May Bean Oil closes 2 pts higher ($32.73), July 4 pts higher ($32.94) and Dec 7 pts higher ($33.35)
Weekly Soybean Export Inspections – 349.3 K T. vs. 375-600 K T. expected
Soybean Planting Progress – 14% vs. 16% expected vs. 17% 5-year average
Soybeans and soybean meal grind lower on Monday. The ideas behind the lower prices are more than ample old crop supplies as well as new crop supplies. Some are suggesting that the first look at the US new crop carryout could be the biggest we have ever seen. With weather ideas calling for clearing and a gradual increase in temps planting ideas are we will get the crop planted in a timely manner. Bean oil catches a minor bid from inter-market spreading as well as the ongoing investigation on bio-diesel dumping involving Argentina and Indonesia. If we get a bullishly construed report it will be from the idea that it is not as bearish as originally thought not that it is outright bullish. I think it would take a lot to see actual bullish numbers.
Interior soybean basis levels if not steady are a little bit better. Like corn locations that were impacted by flooding last week are now seeing those flood waters receding and basis levels are coming back. The gulf eases in response to supplies moving south once again as well as easing shipment rates. July forward spreads are soft in response to renewed trading fund selling. The meal basis continues to be uninspiring. Meal spreads mirrored the action in the soybean spreads.
Since early April the soybean price action resembles an upflag within a major downtrend. We have yet to challenge the low side of the channel but it should be noted that daily momentum indicators do appear to be rolling over. If that comes over the near term it will be the result of a bearishly construed USDA report. Prior to Monday’s trade the meal market had been mostly sideways with the idea of a triangulating price formation. Today’s close is suggesting the triangulation formation is breaking down to the downside. Closes below $310 in July meal will look rather ugly. Bean oil continues to hold onto the interim buy signal that occurred last week when closes above $32.50 were registered. I’m not sure bean oil has that much more left on the upside. If the USDA report is construed as bearish bean oil just won’t fall as fast as soybeans or soybean meal.
Daily Support & Resistance for 05/09
July Beans: $9.58 – $9.71
July Meal; $310.0 – $316.5
July Bn Oil: $32.45 – $33.40
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