Soybean Commentary
Sept Soybeans close 4 cents higher ($9.64 ½), Nov 2 ½ cents higher ($9.71) and March 2 ¼ cents higher ($9.89 ¾)
Sept Meal closes $0.8 higher ($303.6), Dec $0.7 higher ($308.7) and March $0.4 higher ($312.6)
Sept Bean oil closes 11 pts higher ($35.21), Dec 12 pts higher ($35.56) and March 13 pts lower ($35.92)
Soybeans and soybean meal continue their march higher albeit in a more grinding type manner on Wednesday. Soybean oil tries to negate Tuesday’s minor sell signal. The driving force continues to be the idea that so far the month of September is less than desirable for finishing the crop (dryness). We have one more morning for a frost scare in the north, northwest growing areas. There is a fear as to how Hurricane Irma may impact the developing soybean crop down in the southeast. It’s almost common knowledge that China does not have that much coverage on for October, November. The latest Bloomberg trader survey suggests the soybean yield is 48.7 bpa (USDA 49.5), crop production at 4.322 billion bu. (USDA 4.381). The average guess for US carryout is 439 million bu. (USDA 475), World carryout 97.2 M T. (USDA 97.8).
Interior soybean basis locations report steady to lower bids. The Gulf appears to be nothing special. Despite what appears to be an easing cash market soybeans improved fractionally on the day. Offers to sell cash meal, if one reads between the lines, are trying to improve. Meal spreads, too, saw fractional improvement.
Immediate trends read higher but we are beginning to flirt with the low side of some pretty decent looking resistance in both soybeans and soybean meal. Soybean oil tries to negate the minor sell signal from Tuesday but that suggestive sell signal remains intact. I don’t think we need to chase current levels to get involved on the long side as I don’t think it would take much to get a minor correction that would retrace some of the recent rally.
Daily Support & Resistance for 09/07
Nov Beans: $9.60 – $9.85
Dec Meal; $304.0 – $312.0
Dec Bn Oil: $34.90 – $35.90
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