Soybean Commentary
July Soybeans 1 ½ cents higher ($9.23 ½), Aug 2 cents higher ($9.27) and Nov 3 ¾ cents higher ($9.31 ¾)
July Meal closes $0.5 higher ($301.1), Aug $0.5 higher ($302.7) and Dec $0.6 higher ($306.1)
July Bean Oil closes 8 pts higher ($31.39), Aug 8 pts higher ($31.53) and Dec 8 pts higher ($31.99)
In the early going on Tuesday the soy complex too experienced a fair amount of short covering. At one point soybeans were up 12 cents, meal prices up nearly $5 and bean oil prices up 40 points. The highs came early in the session – the balance of the session was spent retracing those gains. This price action once again illustrates the trades’ bias to be long feed grains short oilseeds. The buying that we saw was all speculative short covering. By day’s end I have to think a lot of those spec shorts were reinstated given the closes in proximity to the day’s highs. Going forward any buying the complex sees will be short covering and it will have to be prompted by strength elsewhere within the Ag complex. Next week the USDA should start reporting on the condition of the soybean crop. I have to think we’ll see ratings similar to what we have seen in corn – the best ratings will be in the west with the east trailing.
The interior cash soybean market has taken on a mixed look Tuesday. It appears that some processors are starting to reach for beans as Board crush margins continue to run relatively strong. River locations show a mixed look as well – some locations a bit better while other running a touch easier. The Gulf market is looking at lower bids while offers increased. Soybean spreads continue to be on the defensive – tomorrow starts the first day of the “big boy” index fund roll.
TEF – Just My Opinion – June 6th
It was not a very impressive looking day for the soybean complex as far as technical considerations are concerned. Yes, we pumped out new 6 day highs but the closes appear to be very disappointing. With that said the complex will do well for itself just to maintain recent lows. As I mentioned yesterday we have a supply-demand update scheduled for this Friday. My personal thought is we will see a decent cut in old crop soybeans stocks and that will cut into the new crop carryout. I am not expecting to see any notable changes to the new crop demand.
Daily Support & Resistance for 06/07
July Beans: $9.16 – $9.30
July Meal; $298.0 – $304.0
July Bn Oil: $30.10 – $31.60
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.