Soybean Commentary
July Soybeans 3 ¼ cents higher ($9.16), Aug 2 ¼ cents higher ($9.18 ¼) and Nov 1½ cents lower ($9.18 ¼)
July Meal closes $0.5 higher ($298.1), Aug $0.5 higher ($299.4) and Dec $0.4 lower ($303.0)
July Bean Oil closes 8 pts lower ($31.34), Aug 7 pts lower ($31.47) and Dec 4 pts lower ($31.91)
Wednesday was a day of consolidation for the soybean complex. With Wednesday being month end some minor short covering provided for the consolidation especially since the complex had been hit so hard the past few days. The only news of note that I saw is an Argentine port strike that is scheduled to last 3 days. It’s almost daily that I hear about China being on the verge of cancelling/delaying previously established purchases. Their crush margins have been taking a beating lately due to the large volume of port stocks and with more on the way. As of this writing I’m not looking past further attempts at consolidation. For the near term I’m not sure what’s out there that could buoy the complex’s prices for any sustained time.
River locations see slightly higher basis levels on Wednesday. Other interior locations ran unchanged. The Gulf basis jumps which I think prompted the better river basis. I’m not sure if this is in response to the Argentine port strikes or just the lack of producer selling. The recent collapse in the flat price has pretty much shut down movement. soybean spreads regained a good portion of they lost on Tuesday. Meal spreads edged higher but nowhere near offsetting recent losses.
Wednesday was all about consolidation following the recent short term oversold. As of this writing I’m not looking past further attempts at consolidation leaving the door open for yet further flat price losses. The front end of the soybean complex continues to be burdened with a large supply while the new crop is looking at more than ample acres along with the idea they could grow even further. Is this the darkest before the dawn or are we still in the middle of the night?
Daily Support & Resistance for 06/01
July Beans: $9.05 – $9.25
July Meal; $295.0 (?) – $302.0
July Bn Oil: $31.00 – $31.75
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