November Soybeans closed 5 ¼ cents higher ($9.20 ½), March 6 ½ cents higher ($9.47) & July 6 ½ cents higher ($9.65 ½)
October Soybean Meal closed $4.9 higher ($302.3), Dec $4.8 higher ($306.9) & March $5.0 higher ($312.8)
October Soybean Oil closed 24 pts lower ($29.77), Dec 24 pts lower ($29.82) & March 24 pts lower ($30.33)
Soybeans move higher on Tuesday prompted by forecasts calling for the growing season to end in the northwestern Midwest late this week into early next week. Like corn we’ll have to figure out if we are losing production or creating damage if not both. Adding to the day’s strength is the anticipation of a bullishly construed USDA production supply-demand report on Thursday. Given the particulars around the supply threat one might have thought prices would have moved even higher. Offsetting some of today’s rally is the idea that China/US trade talks may not go well given China’s resistance to their industrial reform as well as their government subsidies. The US has muddied the waters even further with their recent blacklisting of a number Chinese tech firms. Soybean meal manages to rebound against soybean oil from the potential of lost soybeans and or damaged soybeans. I don’t think there is anything bearish to the soybean oil market other than the re-alignment of this spread due to the recent rally in bean oil while the meal market had been in a support testing mode.
Not much happens with the interior soybean basis; Savanna, IL is 2 cents better and that’s about it. The Gulf continues to grind higher stemming from the recent Chinese bookings for relatively quick shipment. Despite the flat price buying spreads within the current crop year widened while old crop did manage to gain on the new crop. The widening of the upfront spreads, I think, is tied to the idea not much is going to come out of the US/China trade talks given the hardline stance both sides appear to be taking. Offers to sell cash meal in the interior continue to show a depressed look while export bids come up a touch and offers come down a touch. Meal spreads saw a similar motion to that of soybeans; a little bearish upfront while old crop manages to gain on the new crop.
Despite the less than stellar performance in soybeans vs. the rally in corn Nov beans still give us its best close dating back to mid-July. The recent downflagging effort in soybean meal now appears to be acting as a springboard for higher prices. Bean oil looks like it has gone into a minor corrective phase given its recent 100 pt rally. good support looks like it has been established in the mid-low $29.00’s (Dec)
Daily Support & Resistance for 10/09
Nov Soybeans: $9.10 – $9.30
Dec Soybean Meal: $303.0 – $311.0
Dec Soybean Oil: $29.50 ($29.30) – $30.20
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