Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 5 cents lower ($8.89 ¼), March 4 cents lower ($9.15) & July 3 cents lower ($9.33 ½)

October Soybean Meal closed $2.2 lower ($293.2), Dec $1.9 lower ($297.6) & March $1.5 lower ($302.8)

October Soybean Oil closed 16 pts lower ($29.04), Dec 13 pts lower ($29.20) & March 14 pts lower ($29.73)

USDA announces 581.0 K T. of soybeans sold to China

Weekly Soybean Export Sales – old crop (2019-20) vs. 800 K – 1.300 M T. expected – new crop (2020-21) vs. none expected

Weekly Soybean Meal Export Sales – old crop (2018-19) vs. 0-150 K T. expected – new crop (2019-20) vs. 200-400 K T. expected

Weekly Soybean Oil Export Sales – old crop (2018-19) vs. 0-25 K T. expected – new crop (2019-20) vs. 5-15 K T. expected

Last week the talk was China would buy 1.0-2.0 M T. of soybeans as a goodwill gesture. This week the talk is that the goodwill gesture will reach 5.0-6.0 M T. of soybeans. Since Sept 13th the USDA has announced 1.3 M T. of soybeans sold to China. Given today’s price performance the trade is not going to believe the bigger numbers until they actually see it and as far as I’m concerned 1.0 M-2.0 M T. just doesn’t cut it. Next Tuesday starts Golden Week in China so if we are to see further soybean sales’ announcements it needs to happen over the next three business days. We still have frost talk for the latter part of next week in the Northern Plains and what is thought to be excessive moisture for parts of the west central and western reaches of the Midwest over the next few days.

The interior soybean basis doesn’t do a whole lot. Processor basis levels run steady to softer as crush margins are the lowest they have been in some time. The interior river basis is running steady to slightly better in response to a slightly higher Gulf. The word is we have sold some beans to China off of the Gulf. The majority of recent sales have come off of the PNW. In recent days nearby soybean spreads have been trying to firm but after today I get the impression they are beginning to have second thoughts. Interior offers to sell cash soybean meal remain depressed looking. Not much is happening at the Gulf. Nearby meal spreads look like a sewer shot and deferred meal spreads aren’t too spiffy looking either.

Two days ago the soybean price charts looked like they were ready to springboard higher from what appeared to be downflagging pattern. After the past two days second thoughts on that idea are developing. Nov beans need to get above the $9.00 level and close above that level if we are to see a resumption of buying. Tomorrow is export sales day; we need to see a strong sales number to squelch the idea we’re going back down to the mid-$8.70’s. If Dec meal can continue to find support in the mid-$290’s any break in the soybean market should be short lived. Dec bean oil still shows some decent technical support against the $29.00 level despite taking it out by a few ticks today. On Monday we get the quarterly stocks report and the final adjustment to last year’s soybean crop. Trade estimates suggest a 20 million bu. cut from the last old crop carryout estimate as well as a 16 million bu. cut to last year’s crop size.

Daily Support & Resistance for 09/26

Nov Soybeans: $8.80 – $9.00

Dec Soybean Meal: $295.0 – $302.0

Dec Soybean Oil: $28.90 – $29.70

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.