Soybean Commentary
July Soybeans 5 cents higher ($10.25 ¼), Aug 4 ½ cents higher ($10.29 ¼) and Nov 4 cents higher ($10.43 ¼)
July Meal closes $0.4 higher ($336.8), Aug $0.5 higher ($338.7) and Dec $0.6 higher ($346.2)
July Bean Oil closes 11 pts higher ($33.73), Aug 13 pts higher ($33.81) and Dec 15 pts higher ($34.32)
Brazilian Soybean Production (CONAB) – 113.9 M T. vs. 113.9 last month vs. 114.0 (USDA)
The rationale for the price action in the soybean complex was similar to what we saw in the corn market. Higher early Monday night followed by a sell-off when unexpected rains (scattered) develop in selected areas of the Midwest. Prices were able to coming march back to within shouting distance of the night time highs once the day session started up as they trade went back to touting the longer term forecasts calling for wide spread “hot & dry”. Given the price action of late I have to think the funds are now in the process of developing net long positions.
Cash soybean movement has been on the increase with the recent rally. Most interior soybean locations have a defensive look. Processors continue to show the best bid structure as margins have stayed firm along with the flat price rally. Nearby soybean spreads show some slight improvement while the upfront new crop contracts lose to their respective deferred contracts. My rationale for that price action is that SA has volumes of soybeans to move over the next number of months. The US usually takes the lead in exports after the 1st of the year.
Needless to say the price action on Monday night, Tuesday says this rally is not done yet. Recently established support levels were tested and they were rejected. This holds true for the entire complex. It was only yesterday that bean oil confirmed an interim buy signal. Tomorrow’s USDA numbers are expected to show a very slight friendly bias. If weather forecasts of late stay consistent higher prices will be the path of least resistance.
Daily Support & Resistance for 07/12
Aug Beans: $10.10 ($10.00) – $10.50 (?)
Nov Beans: $10.25 ($10.15) – $10.65 (?)
Aug Meal; $330.0 – $350.0 (?)
Aug Bn Oil: $33.10 – $34.90
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.