Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 1 cent lower ($9.15 ¼), March ¼ cent lower ($9.40 ½) & July ¾ cent higher ($9.59)

October Soybean Meal closed $1.4 lower ($297.4), Dec $1.6 lower ($302.1) & March $1.1 lower ($307.8)

October Soybean Oil closed 22 pts higher ($30.01), Dec 20 pts higher ($30.06) & March 21 pts higher ($30.57)

USDA announces 198 K T. of soybeans sold to China; 240 K T. of soybeans sold to unknown

Weekly Soybean Export Inspections – 1.038 M T. vs. 900 K – 1.400 M T. expected

Weekly Soybean Crop Condition & Progress – 53% GE (-2%) vs. 55% expected vs. 68% year ago – Dropping Leaves – 72% vs. 87% 5-year average – Harvested – 14% vs. 15% expected vs. 34% 5-year average

It was a two-sided quiet trade for soybeans Sunday night, Monday; barely an 8 cent range. Hard frost/freeze warnings are out for the northwestern reaches of the Midwest late this week. China/US trade talks start up again this week. Over the weekend China said they will not commit to everything the US wants; mainly industrial reform and the stopping of subsidizing certain products. The US administration continues to repeat that if we are to have a deal it will be based on the US getting 100% of what it wants. Bean oil continues to be the leader of the soy products. Last week bean oil took over the product leadership role from the USDA monthly crush report and the administration’s promise on bio-fuel production improvements. Bean oil also got some help on Monday from higher canola prices (harvest delays/potential crop losses due to weather in Canada). Soybean meal continues to dog it as demand for both domestic and export usage remains nothing to write home about.

The interior soybean basis has a mixed look to it. River locations appear to be stabilizing after recent weakness. The processor basis too appears to stabilizing after recent weakness. Board crush margins still look rather weak as weakness in meal prices is offsetting some of the bean oil price gains. The Gulf basis has a pseudo looking firm bias to it after recent Chinese purchases. I’m told the recent Chinese purchases are for relatively quick shipment. Soybean spreads were soft upfront and that trend continued into the balance of the current crop year. Offers to sell cash soybean meal remain soft looking. With that said meal spreads remain soft looking as well.

Soybean price charts remain firm looking as the trade fully anticipates lower production data from the USDA on Thursday as well as an even lower carryout projection. Soybean oil charts too continue to have a firm look as it appears a test of $31.50 (Dec) remains in the cards. Soybean meal, on the other hand, is the weak sister of the complex as price charts show a testing of the recently established support; $300.0 if not lower (Dec). If the USDA report has any bullish slant to it I expect soybean meal to resume its upside leadership role.

Daily Support & Resistance for 10/08

Nov Soybeans: $9.05 – $9.25

Dec Soybean Meal: $300.0 – $306.0

Dec Soybean Oil: $29.50 – $30.50

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.