Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 6 cents lower ($9.28), March 4 ¾ cents lower ($9.54 ½) & July 4 cents lower ($9.72 ¼)

December Soybean Meal closed $3.0 lower ($304.8), March $2.7 lower ($311.4) & July $2.1 lower ($319.3)

December Soybean Oil closed 1 pt higher ($30.40), March 3 pts higher ($30.91) & July 5 pts higher ($31.48)

Where’s the new Chinese buying that the administration suggested would occur? Details on the announced “deal” from last Friday afternoon remain lacking. China has stated they would continue buying based on demand and fair market prices. Fair market prices would be something comparable to SA origin. With tariffs in place we’re not even close. It is my idea that the US will have to remove existing tariffs on Chinese goods for them to remove their tariffs on US goods. The lack of new Chinese buying is working to offset the idea of additional lost bushels from last weekend’s weather event. Adding to the soybean market’s slack price performance is the meal market’s performance. Soybean meal has been a “retreat” mode since it made interim highs last Sunday night.

The interior soybean basis if not higher is no worse than steady. It is my understanding that the producer’s focus is on soybean harvest yet I’m not hearing of too many sales. The Gulf basis continues to grind higher. It is my understanding that a fair amount of the recent Chinese business if for relatively quick shipment (OND) so the lack of producer selling mandates higher Gulf basis levels. Despite the higher basis levels nearby soybean spreads stay relatively wide. Just when I think the interior soybean meal basis is ready to sustain some firming action it sags again. The export basis for meal has been fairly steady for the past few days. If there is a trend to the meal export basis its steady to slightly better. Meal spreads go the route of the soybean spreads; staying relatively wide up front and a soft look going forward.

If one looks at just a soybean price chart it appears that an interim sell signal has been registered with today price action. Daily momentum indicators for Nov beans are on the verge of rolling over. The same daily momentum indicators for Dec soybean meal are clearing rolling over. Dec bean oil’s inside day of Tuesday is not a trend changer but bean oil, at best, is rarely better than a short term supporter of soybeans.

Daily Support & Resistance for 10/17

Nov Soybeans: $9.21 – $9.36

Dec Soybean Meal: $303.0 – $309.0

Dec Soybean Oil: $29.90 – $30.75

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.