Soybeans Commentary


Soybeans – Just My Opinion

September Soybeans closed 12 ¾ cents lower ($8.49 ¾), Nov 14 cents lower ($8.61 ½) & Jan 13 ¾ cents lower ($8.75 ½)

September Soybean Meal closed $3.5 lower ($288.7), Oct $3.9 lower ($290.7) & Dec $4.0 lower ($294.5)

September Soybean Oil closed 32 pts lower ($28.47), Oct 38 pts lower ($28.46) & Dec 35 pts lower ($28.64)

Weekly Soybean Export Sales – old crop vs. 150+100 K T. expected – new crop vs. 200-600 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 25-75 K T. expected – new crop vs. 100-250 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 0-20 K T. expected – new crop 0-80 K T. expected

It was a disappointing day for those that had been trying to be friendly to the soybean complex for the past two days. The news that the US and China would restart trade talks sometime in October fell on deaf ears. There is no scheduled date for these meetings and it doesn’t sound like any “decision makers” will be involved further suggesting nothing will happen anytime soon. Weather forecasts continue to show no frost/freeze anytime soon. It is being suggested by some that the cool nights are shutting down the growth process and the soybean plant will soon start winding down its maturation process. Additionally China announced it will start taking feed meals (soy, rape and sunflower) from Russia which in turn furthers the loss of US market share. It was announced that selected crushing operations in Argentina would go on strike; this too fell on deaf ears. Last but not least it is being thought that Brazil will once again expand soybean production for the coming year. Be aware however that extreme dryness is currently plaguing the top Brazilian producing state of Mato Grosso which in turn could delay the start of planting.

Interior basis levels run steady to easier. The Gulf is down nearly 20 cents from last Thursday. The lack of demand and early harvest in the Delta is weighing on Gulf values. Soybean spreads, November forward, continue to widen. The basis for soybean meal offers is similar to that of soybeans; lower citing the lack of demand. Meal spreads, December forward, continue to widen.

Despite the ugly performance in the flat price November soybeans still look like they are an $8.50 to $9.00 trading range affair. Soybean meal is giving its recent lows a severe test. For as good as the meal market tried to look on Wednesday it looks that bad after today’s trade. Bean oil has a similar looking disappointing price action. Trend line support for December bean oil comes in around the $28.25 level.

Daily Support & Resistance for 09/06

Nov Soybeans: $8.51 – $8.70

Dec Soybean Meal: $293.0 ($291.0) – $298.5

Dec Soybean Oil: $28.25 – $29.00

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.