Soybean Commentary
July Soybeans 4½ cents higher ($9.80 ¾), Aug 4 cents higher ($9.85 ¾) and Nov 5 cents higher ($9.99 ¼)
July Meal closes $3.5 higher ($320.0), Aug $3.7 higher ($322.0) and Dec $4.1 higher ($329.7)
July Bean Oil closes 32 pts lower ($32.83), Aug 34 pts lower ($32.90) and Dec 33 pts lower ($33.38)
Informa suggests the US soybean crop is 4.253 billion bu. w/ a yield of 47.9 bpa
Weekly Export Sales – Soybeans – old crop vs. 200-400 K T. expected; new crop vs. 50-250 K T. expected – Soybean Meal – old crop vs. 25-150 K T. expected; new crop vs. 0-100 K T. expected – Soybean Oil – old crop vs. 8-22 K T. expected; new crop vs. 0-5 K T. expected
Soybeans and soybean meal pump out new highs/new high closes for the current rally but it came in a grinding type manner. Initial support was the downgrade in crop conditions reported by the USDA Wednesday afternoon. The break we saw overnight was in response to the wheat market taking it on the chin but once the day session started prices firmed to positive on the day and the balance of the session had prices staying in positive territory. Weather considerations are the same as that affecting the corn market – will the ridge that is expected to set up over the Northern Plains slide east and/or will storms ride over the ridge and down into the central and eastern reaches of the Midwest?
The interior soybean basis had a bit of a mixed look on Thursday as a couple of processor locations bumped up their respective basis while River locations were posting lower bids. The Gulf appears to be a bit easier as it rolled to basis August. Old crop continues to lose to new crop as most in the trade are focusing on weather forecasts and it possible impact on crop development. With that in mind we have to remember that the “make it or break it” month for soybeans is August, not so much July. The meal basis remains in the dumper and old crop continues to lose to the new crop.
The price action continues to support the idea of higher prices. The grinding motion higher is in response to the idea that the market is grinding through resistance levels that were established last March. As I mentioned a bit ago soybeans are made in August so the current weather scenario is more of a “what if” scenario – what if the expected ridge over the Northern Plains slides east and sits over the Midwest for the next 6 weeks or so.
Daily Support & Resistance for 07/07
Aug Beans: $9.70 – $9.90 ($10.05)
Nov Beans: $9.80 – $10.10 ($10.20)
Aug Meal; $315.0 – $329.0
Aug Bn Oil: $32.60 – $34.00
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