Soybean Commentary
Jan Soybeans close 29 cents higher ($10.32), March 28 ¾ cents higher ($10.40 ¼) and July 27 ½ cents higher ($10.55 ¼)
Jan Meal closes $13.5 higher ($324.2), March $13.0 higher ($327.9) and July $12.1 higher ($332.0)
Jan Bean Oil closes 6 pts higher ($35.85), March 7 pts higher ($36.07) and July 8 pts higher ($36.56)
Weekly Export Sales – Soybeans – 348.9 K T. old crop vs. 500-800 K T. expected; <-57.0 K T.> new crop vs. none expected – Soybean Meal – 119.1 K T. old crop vs. 40-160 K T. expected; 1.0 K T. new crop vs. none expected – Soybean Oil – 7.3 K T. old crop vs. 5-30 K T. expected; no new crop vs. none expected
The long and short of the USDA soybean reports – the reaction was bullish. US production comes lower than expected. the US projected carryout comes in lower than expected as does the projected world carryout. Quarterly Soybean Stocks come in lower than expected. Demand data was left unchanged. The US stocks-to-usage went from 11.68% to 10.22%. personally I thought the soybean data was modestly constructive but not to the tune that we saw. Soybean meal was the clear leader here. It is my thought the trade was adding risk premium to the price structure in lieu of the weather worries around the Argentine growing conditions.
I track 9 different interior soybean basis locations. 2 of the nine were easier, the balance ran unchanged. The 2 locations that showed improvement are on river systems that feed the gulf. Bids at the Gulf ran 3 cents lower. Soybean spreads had a firm bias within the old crop while old crop gains noticeably on the new crop. The old crop/new crop spread improvement is due to the idea of noticeably more soybean acres next season.
The rally in beans and meal has prices in noticeable congestive type resistance. Thursday’s rally in beans and meal may be a bit overdone in the short term but longer term daily momentum indicators read higher; gaining traction as prices rally out of the recent consolidation patterns. Prices are nowhere near overbought on a daily basis. Bean oil had a sharp rally off of the report but the rally lasted about 4-5 minutes – its rally tapped at the low side of the topping formation that was established in late November, the first half of December. Going forward I have to think its all about the growing conditions in Argentina.
Daily Support & Resistance for 01/13
March Beans: $10.26 – $10.50
March Meal; $323.0 – $331.0 ($335.0)
March Bn Oil: $35.55 – $36.60
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