Soybeans Commentary


Soybeans – Just My Opinion

Estimates for USDA October Soybean Production & Supply-Demand Report (Sept Estimate)

Ave. Soybean Production Estimate – 3.583 billion bu. (3.633 billion bu.) – Ave. Soybean Yield Estimate- 47.3 bpa (47.9 bpa) – Ave. Soybean Harvested Acres Estimate – 75.705 million acres (75.866 million)

Ave. US Soybean Carryout Estimate – 521 million bu. (640 million) – Ave. World Soybean Carryout Estimate – 96.46 M T. (99.19 M T.)

November Soybeans closed 3 ¼ cents higher ($9.23 ¾), March 2 ¾ cents higher ($9.49 ¾) & July 3 ¼ cents higher ($9.68 ¾)

October Soybean Meal closed $3.1 higher ($305.4), Dec $2.8 higher ($309.7) & March $2.7 higher ($315.5)

October Soybean Oil closed 14 pts lower ($29.63), Dec 11 pts lower ($29.71) & March 13 pts lower ($30.20)

Weekly Export Soybean Export Sales – old crop vs. 1.300-1.800 M T. expected – new crop vs. none expected

Weekly Soybean Meal Export Sales – old crop vs. 0-100 K T. expected – new crop vs. 100-300 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 0-10 K T. expected – new crop vs. 5-25 K T. expected

Soybeans and soybean meal extend their rally by modest amounts on Wednesday. Overnight China said they are looking for a partial trade deal that would involve buying more US Ag. In this case they suggested they would raise their commitment of buying soybeans from 20.0 M T. to 30.0 M T. This would be contingent on the US doing away with current tariffs as well as not enacting any new tariffs. Upper echelon negotiators will resume meeting Thursday and Friday. The growing season is expected to end this weekend, early next week in the northwestern reaches of the Midwest. The impact of lost bushels vs. damaged bushels remains to be seen. Last but not least a pseudo looking bullish production/supply-demand report is expected from the USDA tomorrow.

The interior soybean basis still shows river locations involved with export having a steady to firm slant. The processor basis runs steady to a touch better. Board crush margins have been inching higher over the past few days. The Gulf basis is firm as it holds on to recent gains. Soybean spreads involving November were firm while Jan forward spreads were steady to weak out to Sept 2020. Interior offers to sell cash soybean meal continue to tout light demand. The export meal market sees a rising bid with steady offers. Meal spreads showed slight improvement all the way out to the last month of the old crop.

Soybean charts (Nov) look strong but technical resistance from $9.40 to $9.50 looks a bit ominous. December soybean meal is looking at some decent looking congestive resistance closer to the $315.0 level. The recent downflagging effort (prior to Tuesday’s rally) measures to $317.0. Dec soybean oil has entered a minor corrective phase from its 140 pt rally. Good looking congestive support shows up near the 29.25 level with initial resistance at $30.50.

Daily Support & Resistance for 10/10

Nov Soybeans: $9.08 – $9.40

Dec Soybean Meal: $303.0 – $317.0

Dec Soybean Oil: $29.25 – $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.