Soybeans Commentary


Soybeans – Just My Opinion

September Soybeans closed 6 cents higher ($8.62 ½), Nov 7 cents higher ($8.75 ½) & Jan 7 cents higher ($8.89 ¼)

September Soybean Meal closed $4.2 higher ($292.2), Oct $4.2 higher ($294.6) & Dec $4.4 higher ($298.5)

September Soybean Oil closed 8 pts lower ($28.79), Oct 10 pts lower ($28.84) & Dec 10 pts lower ($28.99)

USDA announces 451.7 K T. of soybeans sold to Mexico

It is my opinion that the soybean and soybean meal markets got a boost from the idea that Argentina could soon be out of the export market. Argentina producers are expected to become tight holders of soybeans as a hedge against the current economic turmoil and expectations for more. Yes, the US crop is noticeably late but so far I see no frost/freeze threats out to mid-month. The 10-14 day forecasts will be closely monitored on a daily basis for signs of when the season will end. I have not seen any new news on the US/China trade front. It was thought we would have some face to face meetings this month but I have not seen anything scheduled.

Processors have the best soybean basis while river locations have the worst. The Gulf continues to ease. Soybean spreads had a very slight bullish bias that went along with today’s outright buying. The interior soybean meal basis is mostly steady while bids at the Gulf appear to be better. Crusher downtime continues to have mixed results depending upon location. Soybean movement is next to nothing which helps the processor bids as well as propping up offers to sell soybean meal.

The lateness of the crop coupled with what is happening in Argentina (tight producer holding) should be enough to keep the soybean and soybean meal markets alive; how much alive remains to be seen. Since early August November soybeans have developed into an $8.50 to $9.00 trading range. As of this writing I see no reason why this scenario should not continue. December soybean meal continues to honor the $294.0-$295.0 suspected support level. $305.0-$306.0 is thought to be near term resistance. Given the news around Argentina I would think this level will be tested sooner vs. later. Although December soybean oil has been playing second fiddle to the meal market recent price action suggests $29.50 will be tested in very short order and a test of the $30.00-$30.25 levels is not out of the question.

Daily Support & Resistance for 09/05

Nov Soybeans: $8.68 – $8.85

Dec Soybean Meal: $296.0 – $301.0

Dec Soybean Oil: $28.75 – $29.35

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.