Soybeans Commentary


Soybeans – Just My Opinion

September Soybeans closed 29 cents higher ($8.83), Nov 29 cents higher ($8.95 ½) & Jan 28 ½ cents higher ($9.09)

September Soybean Meal closed $6.5 higher ($296.1), Oct $6.6 higher ($297.6) & Dec $6.6 higher ($301.3)

September Soybean Oil closed 29 pts higher ($29.02), Oct 36 pts higher ($29.01) & Dec 33 pts higher ($29.16)

Weekly Soybean Export Sales (2019-20) – 1.172 M T. vs. 600 K – 1.100 M T. expected

Weekly Soybean Meal Export Sales – 37.9 K T. old crop vs. 25-75 K T. expected – 81.1 K T. new crop vs. 100-250 K T. expected

Weekly Soybean Oil Export Sales – 8.3 K T. old crop vs. 0-10 K T. expected – 2.6 K T. new crop vs. 5-25 K T. expected

Highlights of USDA Soybean ReportUS Old Crop – Increased crush 20 million bu., increased exports 45 million bu., lowered carryout 65 million bu. – US New Crop – lowered carryin by 65 million bu., lowered yield 0.6 bpa, lowered production 47 million bu., lowered carryout by 115 million bu. – World Old Crop – lowered carryout by 2.12 M T. – World New Crop – Lowered carryout by 2.55 M T.

The soybean market was firm for the first half of the session, dipped a bit going into the USDA report and then resumed its grind higher after the USDA report. Despite the production data coming in higher than expected carryout data came in lower than expected. The early part of the session’s strength was attributed to positive talk around the China/US trade relations. Mid-session it was reported that China had bought 600 K T. of US soybeans earlier in the day and then the WH came out and said they are expecting China to buy agricultural products “in large amounts”. Like the corn crop the trade remains skeptical that the soybean crop will reach full maturity as well as the accuracy of the reported harvested acres.

The interior soybean basis had a mixed look to it today. The Ohio River is weaker, processors steady but with a weaker bias and Illinois River locations steadying up after recent weakness. The Gulf basis was a couple of cents higher at its midday posting but still looking rather ugly. The midday announcement of China buying 600 K T. of US soybeans is supposedly happening out in the PNW for Oct/Nov shipment. Soybean spreads ran with a bullish bias all the way out to the new crop. Offers to sell cash soybean meal in the interior still looks like they are looking for buyers while the Gulf is firming. Meal spreads had a fractional bullish bias.

The immediate downtrend that has been in place since July 15th has fallen by the wayside on the November soybean chart. The next downtrend line comes in around the $9.10 level. Dec Meal has a similar looking picture as its downtrend line that has been in place since mid-June has too fallen by the wayside. Bean oil too has taken on a positive look as its downtrend line from early mid-August has fallen by the wayside as well. The bottomline to the soybean complex going higher will continue to take its cue from the ongoing China/US trade rhetoric as well as weather forecasts especially if there is a hint to an early end to the growing season.

Daily Support & Resistance for 09/13

Nov Soybeans: $8.86 – $9.04

Dec Soybean Meal: $297.0 – $305.0

Dec Soybean Oil: $28.80 – $29.50

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.