Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 9 ¾ cents higher ($8.92 ½), March 8 ¼ cents higher ($9.17) & July 6 ¼ cents higher ($9.35)

October Soybean Meal closed $3.4 higher ($294.5), Dec $3.6 higher ($298.6) & March $3.3 higher ($303.2)

October Soybean Oil closed 9 pts lower ($29.19), Dec 9 pts lower ($29.31) & March 9 pts lower ($29.84)

Weekly Soybean Export Inspections – 922.5 K T. vs. 600-900 K T. expected

Weekly Soybean Crop Condition & Progress – 54% GE (unch) vs. 54% expected vs. 68% year ago –Dropping Leaves – 34% vs. 59% 5-year average

On Friday the soybean market broke down due to idea the US/China trade were not going well as a China trade delegation cancelled plans to visit areas in Montana and Nebraska. As it turned out the delegation was asked by the US not to go citing “domestic issues”. Over the weekend both sides said trade talks were going well. Earlier today it was announced (unofficially) that China purchased another 600 K T. of US soybeans off of the PNW. It is thought that both sides will get together in the 2nd week of October here in the US. On the weather front; there is some frost talk for the Northern Plains by mid next week and a wet bias for the central parts of the Corn Belt.

Over the past week the interior soybean basis has a mixed look. the Ohio River is 3 cents better, Burns Harbor unchanged, Decatur, IL 3 cents lower, Decatur, IN unchanged, Lincoln, NE unchanged, Toledo unchanged, Seneca, IL 2 cents better, Savana, IL 4 cents easier and Davenport 4 cents easier. The Gulf runs a bit better vs. one week ago but when your bid is in the “teens” how good could it be. Soybean spreads showed a tighter bias with the buying we saw today. Since earlier in the month soybean spreads have shown a sideways to a slightly higher bias. Offers to sell cash meal in the interior continue to suggest processors are not finding many takers. The Gulf seems to firm when the interior weakens. Spreads involving the October contract continue to be soft looking. Dec forward spreads are showing a slightly tighter bias.

Flat price soybean charts show a downflag that may be on the verge of popping higher. It is my thought the next close in November above $9.00 should attract some new buying in the form of short covering. The latest CFTC data does show a bias of short covering. Flat price soybean meal (Dec) continues to honor the suspected support, $293.0-$295.0. Dec meal did register an outside day today closing noticeably above the previous two days highs. Soybean oil continues to retreat from the 5 month highs we saw just one week ago. If the soybean market is to sustain moves higher it will be the soybean market leading vs. bean oil. Bean oil induced rallies are usually selling opportunities for soybeans such as we saw last Monday.

Crop conditions ran unchanged yet the crop remains noticeably late and there is frost in the forecast (next week?). Given the idea that the Chinese are back in the US’s good graces coupled with the possible weather issues I have to think we’re supposed to be buying breaks in the near term.

Daily Support & Resistance for 09/24

Nov Soybeans: $8.84 – $9.04

Dec Soybean Meal: $295.5 – $302.0

Dec Soybean Oil: $29.00 – $29.75

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.