Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 5 ¾ cents lower ($9.13 ¾), March 3 cents lower ($9.38 ½) & July unchanged ($9.56 ½)

October Soybean Meal closed $3.8 lower ($300.3), Dec $3.4 lower ($305.6) & March $2.6 lower ($311.0)

October Soybean Oil closed 23 pts higher ($29.06), Dec 33 pts higher ($29.21) & March 31 pts higher ($29.69)

USDA announces 464.0 K T. of soybeans sold to China – Since Sept 13th “announced” sales total 2.148 M T.

Weekly Soybean Export Sales – old crop vs. 900 K – 1.400 M T. expected – new crop vs. none expected

Weekly Soybean Meal Export Sales – old crop vs. 0-100 K T. expected – new crop vs. 50-250 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 0-15 K T. new crop vs. 5-25 K T.

It was day of correction throughout the soybean complex. Soybeans and soybean meal retraced a minor amount of their recent rally while bean oil retraced some of their recent break. I think the Chinese soybean sales announcement of 464.0 K T. was a bit disappointing since the trade had talking about Monday trading 600 K – 1.000 M T. sales total. Tomorrow is export sales day so we’ll see if the total Chinese sales go beyond what was announced last week. Weather is forecasted to change from the recently excessive wet conditions in the west central, west and northern reaches to a drier bias. Earlier ideas for the production and supply-demand update next Wednesday suggest a slight bump up in production that will offset some of the lower carryin. Yesterday’s USDA crush data was a bit disappointing for the amount of soybeans crushed vs. expectations but was bullish for soybean oil.

Interior river locations that feed down to the Gulf run steady to noticeably better. It seems most of the recent business done with China is for Oct/Nov shipment. Processors do not appear in any hurry to originate new crop soybeans as board crush margins are clearly on the defensive. The midday posting at the Gulf gives back some of the strength that was seen yesterday. Nearby soybean spreads are back to the low/wide levels that were seen prior to the Monday/Tuesday rally. Advertised offers to sell cash soybean meal in the interior continue to advertise they are not finding many buyers. It is interesting to note that Gulf bids are weaker for meal while offers are higher. Meal spreads are back on the defensive following the recent 2-day improvement.

Wednesday’s inside day of Tuesday’s rally doesn’t suggest the rally is over just time for a pause. Be open to the idea we could drift back down to the former resistance level in the low $9.00’s (Nov). I’ve always said that meal is the deal. Dec meal challenged suspected resistance at $310.0 and was turned back down. As goes the meal market so goes the soybean market. It will be interesting to see if today’s soybean oil rally can follow through despite crude oil prices continuing to move lower. Bean oil has bullish fundamental data of its own in the form of bio-diesel demand but is still heavily influenced by the goings on the palm oil market which remains depressed looking. Tomorrow is export sales day – we’ll take our cue from them as well as updated forecasts.

Daily Support & Resistance for 10/03

Nov Soybeans: $9.05 – $9.25

Dec Soybean Meal: $302.0 – $310.0

Dec Soybean Oil: $28.90 – $29.40 ($29.70)

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