Soybean Commentary
August Soybeans 4 cents lower ($9.85), Sept 3 ½ cents lower ($9.89 ¼) and Nov 4 cents lower ($9.97 ½)
August Meal closes $1.9 lower ($321.8), Sept $1.9 lower ($323.8) and Dec $1.7 lower ($329.5)
August Bean Oil closes 23 pts lower ($33.01), Sept 22 pts lower ($33.14) and Dec 24 pts lower ($33.44)
Weekly Soybean Export Inspections – 285.9 K T. vs. 250-450 K T. expected
NOPA June Crush – 138.0 million bu. vs. 143.0 million bu. expected – Soybean Oil Stocks – 1.703 billion lbs. vs. 1.714 billion lbs. expected
Soybean Crop Condition & Progress – 61% GE vs. 61% expected vs. 71% year ago – 52% blooming vs. 51% 5-year average – 16% setting pods vs. 13% vs. 5-year average
Soybeans and soybean meal traded in similar fashion to what we saw in the corn – lows of the day were made Sunday night and the highs during the day session. Soybeans were able to take out Friday’s retracement high but were unable to sustain the rally as the midday weather updates showed better possibilities for moisture for both the near as well as for longer term. The NWS disagrees with this forecast from Illinois west. The best soybean meal could do was match Friday’s high before selling off. Bean oil could not get much going in either direction. For the soybean market it’s all about weather going forward as most of the soybean crop is made or broken during the month of August. For what it is worth the trade is expecting to see further downgrades in crop conditions. If this comes to fruition it should allow the complex to continue to stand in for the short term with it recent attempts to retrace/consolidate last week’s sell-off.
The interior soybean cash markets are giving me a mixed look on Monday. The Ohio River is easier while the Illinois River is better. Processors continue to show the best bid structure. The Gulf continues to rebound from last week’s sell-off. Nearby soybean spreads ran mostly steady. Offers to sell cash soybean meal remain in the dumper – meal spreads were steady upfront while weaker vs. the deferreds.
The price action we have seen since last week’s sharp selloff in both the bean and meal markets looks like a dead cat bounce. When I break down the action into an inter-day look it resembles an upflag. The same holds for the bean oil market but the broader look at bean oil is that of a trading range affair that suggests failure after challenging the topside of the trading range. As I alluded to earlier it’s going to be all about the weather going forward.
Daily Support & Resistance for 07/18
Aug Beans: $9.72 – $10.02
Nov Beans: $9.84 – $10.15
Aug Meal; $316.0 – $329.0
Aug Bn Oil: $32.80 – $33.50
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.