Soybean Commentary
Sept Soybeans close 7 ¾ cents lower ($9.23), Nov 4 cents lower ($9.33 ¼) and March 3 ¼ cents lower ($9.52 ¼)
Sept Meal closes $2.2 lower ($292.4), Dec $1.8 lower ($297.4) and March $1.4 lower ($301.8)
Sept Bean oil closes 5 pts higher ($34.33), Dec 4 pts higher ($34.69) and March 4 pts higher ($35.04)
USDA announces 131 K T. new crop soybeans sold to China
Weekly Export Sales – Soybeans – old crop vs. -600+200 K T. expected; new crop vs. 1.000-*1.500 M T. expected – Soybean Meal – old crop vs. 30-160 K T. expected; new crop vs. 75-150 K T. expected – Soybean Oil – old crop vs. 8-25 K T. expected; new crop vs. 0-10 K T. expected
Soybeans sag as recent assessments of the Delta crop vs. the impact of the hurricane do not appear to be that severe. Soybean meal is once again the weak link to the complex weighing on soybeans and bean oil could not muster up enough strength to be an offsetting issue. Tomorrow is 1st notice day for the Sept contract – coming into today there were 559 soybean contracts registered for delivery, 200 soybean meal contracts and 2614 soybean oil contracts. It will be interesting to see how soybean deliveries pan out given the slowdown in shipping at the Gulf. In my opinion soybean meal deliveries will be everything they have given the poor basis structure. There are always some bean oil deliveries but this time may be different given the changes with the bio-diesel program (bullish).
Soybean spreads are soft led by the 1st notice day Sept contract. Basis levels don’t help as they have a soft look as well. Only the processor shows evidence of standing in. Nothing new with the offers to sell cash meal as demand is slack at best on the home front. Locations that are going through some downtime are the only ones that show any kind of strength and even then it’s nothing to write home about. Meal spreads too reflected 1st notice day jitters.
The recent upflagging price action in the soybean market continues to show evidence of rolling over. Soybean meal is stable at best despite being the weak link with in the complex. The suggestive buy signal we saw last week has yet to be negated but the price action leaves a lot to be desired. Soybean oil continues to back and fill the recent rally while probing the gap from last week while managing to close above it. My overall bias towards the soy complex is that it is not going to break down. The other side of that coin is that I’m not sure it will be going anywhere fast.
Daily Support & Resistance for 08/31
Nov Beans: $9.29 – $9.42
Dec Meal; $295.0 – $301.0
Dec Bn Oil: $34.40 – $35.25
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.