Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 6 ½ cents lower ($9.34), March 5 ¾ cents lower ($9.59 ¼) & July 4 ¼ cents lower ($9.76 ¼)

December Soybean Meal closed $3.1 lower ($307.8), March $2.9 lower ($314.1) & July $2.8 lower ($321.4)

December Soybean Oil closed 39 pts higher ($30.39), March 37 pts higher ($30.88) & July 34 pts higher ($31.43)

USDA announces 142.6 K T. of soybeans sold to Unknown

NOPA September Crush – 152.5 million bu. vs. 162.1 million bu. expected – Soybean Oil Stocks – 1.442 billion lbs. vs. 1.320 billion lbs. expected

Weekly Export Soybean Inspections – 954.8 K T. vs. 750 K – 1.250 M T. expected

Weekly Soybean Crop Condition & Progress – 54% GE (+1%) vs. 52% expected vs. % year ago – Dropping Leaves – 85% vs. 93% 5-year average – Harvested – 26% vs. 25% expected vs. 49% 5-year average

The trade is still trying to figure out what kind of deal has been made with China since nothing has been put on paper and signed off on. I am hearing/reading that China would like to see all tariffs removed before moving forward. Also up in the air is the unknown around this past weekend’s snowstorm in the Northern Plains and the unexpected hard freezes elsewhere; how many bushels have been lost and or damaged. As in corn hopefully tonight’s soybean maturity ratings will shed some light on this issue. Weekly soybean export inspections were midrange of expectations. NOPA crush data for September was deemed disappointing based on expectations as to the amount of bushels crushed. The data also put a dent in the bean oil’s earlier in the day rally. The rally in bean oil stemmed from the possible increase in biofuel production which could lead to higher bean oil usage for bio-diesel. I thought the meal export number within the NOPA data was positive but its reaction lasted for all of 10-15 minutes.

Despite the idea the US producer is focusing on his soybean harvest interior soybean basis levels are running steady to mostly higher. The most notable changes I’m seeing are Decatur, IL up 12 cents, Lincoln, NE up 10 cents and Davenport, IA up 15 cents. The Gulf stays firm but not running away. The nearby soybean spread stays wide. As one moves forward spreads continue to show a softening trend. Offers to sell cash meal in the interior sees truck offers steady to easier while rail offers run steady to better. The gulf for meal runs unchanged. Meal spreads continue to trend fractionally softer out to August.

Today’s inside day of Monday (Nov soybeans) is not necessarily a trend changer whereas meal losing noticeably to bean oil does cast an ominous look. As you know I’ve never been a fan of bean oil being a bullish influence on soybeans. Soybean oil did see some buy stop activity when it ran through the August and Sept highs but the inability to sustain the rally does create some doubts as to its ability to run higher in the near term.  As of this writing $31.00 (Dec) looks like an absolute based on everything we know.

Daily Support & Resistance for 10/16

Nov Soybeans: $9.25 – $9.40

Dec Soybean Meal: $305.0 – $311.0

Dec Soybean Oil: $29.90 – $30.60

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.