Soybean Commentary
August Soybeans close unchanged ($9.63), Sept 1 cent lower ($9.66) and Nov unchanged ($9.73 ¼)
August Meal closes $1.2 lower ($306.6), Sept $1.2 lower ($308.3) and Dec $1.4 lower ($312.9)
August Bean Oil closes 33 pts higher ($34.13), Sept 32 pts higher ($34.19) and Dec 31 pts higher ($34.53)
USDA announces previous sale of 130 K T. old crop soybeans to unknown has been cancelled
Weekly Export Sales – Soybeans – old crop vs. 100-300 K T. expected; new crop vs. 250-450 K T. expected – Soybean Meal – old crop vs. 0-100 K T. expected; new crop vs. 50-150 K T. expected – Soybean Oil – old crop vs. 5-20 K T. expected; new crop vs. 0-5 K T. expected
Wednesday brought us a two-sided trade for both the soybean and soybean meal markets. The weakness we saw early in the session can be attributed to the rain that was out west as it looked like Iowa could get something out of it. As the morning went on that rain event moved mostly east so only the northern border of Iowa received rainfall and that firmed prices. Prices sold off late as the meal market was unable to sustain its earlier gains. Bean oil carried the ball as it registered 5-day highs. Not much of a change is expected from the USDA as far as a new crop yield is concerned. I think the bigger number will be how much the old crop carryout comes down. It is widely thought that the USDA has understated old crop export sales – offsetting some of this is the thought that the USDA has overstated the old crop crush.
Most interior river locations involved for export continue to show a need for soybean origination. The Gulf market continues to be in a grinding higher mode. Not much went on in the nearby spreads – Sept loses to November forward but then again who really wants September beans. Offers to sell cash meal continue to be pathetic looking. Meal spreads continue to grind south.
For the short term the price action suggests soybeans are in a minor upside recovery mode. It’s a bit disheartening that bean oil continues to be the best supporting issue. I’ve never been a fan of a soybean rally sustaining itself when led by the bean oil. If the meal market can’t do it then the eventuality is the soybean market won’t be able to do it either. Given the idea that the USDA won’t show us much of change in the new crop yield focus will move to forecasts and the latest from the NWS appears quite conducive to making a soybean crop.
Daily Support & Resistance for 08/10
Nov Beans: $9.55 (?) – $10.05
Dec Meal; $304.0 – $328.0
Dec Bn Oil: $33.75 – $35.25
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