November Soybeans closed 4 ½ cents higher ($9.40 ½), March 4 cents higher ($9.65) & July 3 ¾ cents higher ($9.80 ½)
October Soybean Meal expired $0.9 lower ($306.0), Dec closed $0.1 higher ($310.9) & March $0.4 higher ($317.0)
October Soybean Oil expired 7 pts higher ($29.90), Dec closed 3 pts higher ($30.00) & March 5 pts higher ($30.51)
Weekly Export Soybean Inspections – delayed until tomorrow due to Columbus Day holiday
Weekly Soybean Crop Condition & Progress – delayed until tomorrow due to Columbus Day holiday
The US announcement that we have come to a minor trade accord with China set the day’s high early in the Sunday night session. Details, however, remain a bit sketchy as the US says China will buy all sorts of US Ag goods ($40-$50 billion worth) while China fails to confirm. Initially the dollar amount suggested was for the coming year. Later conversation suggested it would be spread out over two years. Once again China fails to confirm any of this. What China has stated is that want additional meetings later this month before they ink any deal. As far as tariffs are concerned the US has held off on the tariffs that would have been enacted on October 15th. Existing tariffs remain in place and the possibility of additional tariffs scheduled for December remains on the table. It would be a bit of a surprise to me that China buys much more before the “deal” has been inked. Underlying support for the soybean market comes from the impact of the winter storm that occurred in the northern US Plains over the weekend as well as hard freezes that were seen elsewhere in the Midwest. It froze in places over the weekend that was not previously forecasted.
Most interior soybean basis locations are reporting unchanged levels. Soybean harvesting is happening in many locations that are not dealing with excessively wet conditions. Soybean harvest is expected to expand through the Midwest as move through the week. The Gulf soybean basis is not running away on the upside but does remain firm. The nearby soybean spread, Nov/Jan, stays wide but as we move forward spreads do show improvement. Offers to sell cash meal in the interior remain depressed looking while the Gulf is steady with a very slight firm bias. Meal spreads ran fractionally mixed in the current crop year while old crop gains fractionally on the new crop.
$9.48 was the summer high for November soybeans. We came within a few cents of that mark Sunday night. The product markets continue to grind higher but to a much lesser extent vs. the soybean market. Board crush margins are in new contract low ground. I have to wonder how long the soybean market can move higher if the product markets continue to dog it in comparison. Since Monday was a federal holiday there were no USDA announcements. Once the USDA comes back to work the bulls will be expecting to see further export announcements. Without them I have to question just how much more upside can we see in the near term.
Daily Support & Resistance for 10/15
Nov Soybeans: $9.25 – $9.50
Dec Soybean Meal: $307.0 – $314.0
Dec Soybean Oil: $29.60 – $30.40
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.