Soybean Commentary
August Soybeans close 32 ¼ cents lower ($9.30 ¾), Sept 32 cents lower ($9.34) and Nov 33 cents lower ($9.40 ¼)
August Meal closes $12.4 lower ($294.2), Sept $12.5 lower ($295.8) and Dec $12.7 lower ($300.2)
August Bean Oil closes 39 pts lower ($33.74), Sept 40 pts lower ($33.79) and Dec 37 pts lower ($34.16)
After the close the USDA reports that US farmers reported prevented plantings of 437 K soybean acres
Weekly Export Sales – Soybeans – 45.0 K T. old crop vs. 100-300 K T. expected; 639.3 K T. new crop vs. 250-450 K T. expected – Soybean Meal – 6.0 K T. old crop vs. 0-100 K T. expected; 136.5 K T. new crop vs. 50-150 K T. expected – Soybean Oil – 27.7 K T. old crop vs. 5-20 K T. expected; no new crop vs. 0-5 K T. expected
Did the USDA give us a “Clarence Beeks” report on Thursday? The trade was looking for a slight decrease in yield (off 0.5 bpa); the USDA increased the yield by 1.5 bpa. Given current crop conditions does the USDA know something about the August weather we don’t? For what it is worth the midday weather updates showed a wetter bias vs. yesterday’s drier bias. Today’s wetter bias is in keeping with what the NWS had to say yesterday afternoon (and again this afternoon). The cut in the old crop carryout (down 40 million bu.) and the increase in demand (up 66 million bu.) was not enough to offset the 121 million bu. increase in production. The end result was carryout increase of 15 million bu. Adding insult to injury the projected World carryout increased by 4.25 M T.
In recent days Nov beans saw a 33 cent correction. Now that the correction has failed the downside target is now the mid-low $9.20’s.
Dec meal is now in line to challenge the $295.0-$294.0 level. Failure at that level would suggest something closer to the mid-low $280’s. Bean oil, which had been strength of the complex, is now looking at something down towards the $32.00 – $32.50 level. In other words (without weather considerations) anyone that has been trying to get friendly to the soy complex is going to get washed out.
Daily Support & Resistance for 08/11
Nov Beans: $9.28 – $9.55
Dec Meal; $294.0 – $309.0
Dec Bn Oil: $33.60 – $34.45
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.