Soybean Commentary
August Soybeans 35 cents lower ($9.59 ½), Sept 35 ¼ cents lower ($9.64 ¼) and Nov 35 ½ cents lower ($9.71 ¾)
August Meal closes $10.3 lower ($308.3), Sept $10.4 lower ($310.3) and Dec $10.9 lower ($314.5)
August Bean Oil closes 85 pts lower ($33.86), Sept 84 pts lower ($33.97) and Dec 85 pts lower ($34.28)
USDA June Crush – 4.62 M T. vs. 4.40 expected
Between the unexpected rise in Monday afternoon’s condition report and the latest short term forecasts the soy complex did not stand a chance on Tuesday. Prices gapped lower Monday night, tried to briefly retrace, and then kept declining accelerating lower during Tuesday’s day session. If recent forecasts do come to fruition the month of August will indeed be a soybean making month. With that said I think it would be unlikely that the USDA shows us much of a yield reduction on its August 10th report.
Interior river locations that feed down to the Gulf continue to suggest they want soybeans. The Gulf market has been grinding higher for the past 10 days or so. Soybean spreads saw some fractional firming in the nearby months while widening vs. March forward. The interior meal basis is showing some minor signs of firming. Nearby spreads firmed fractionally but like the soybean spreads nearby contracts lost ground vs. March forward.
The recent attempt by the soybean and soybean meal markets to establish a trading range affair near its recent upper end has fallen by the wayside with today’s activity. In recent days bean oil had been an upside leader; after today’s activity momentum has now shifted to lower. The next downside target for Nov beans is now the June 30th/July 3rd gap at $9.58. After that I would employ a $9.85 to $10.35 measurement down to the $9.35 level. Similar analysis would suggest Dec meal is now looking at $305.0.
Daily Support & Resistance for 08/02
Sept Beans: $9.53 ½ (?) – $9.78
Nov Beans: $9.58 (?) – $9.85
Dec Meal; $308.0 – $320.0
Dec Bn Oil: $33.70 – $34.80
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