Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed ½ cent higher ($9.20 ¾), March 1 cent higher ($9.47 ¾) & July 2 cents higher ($9.69)

December Soybean Meal closed $0.7 higher ($304.0), March $0.8 higher ($310.2) & July $1.0 higher ($317.9)

December Soybean Oil closed 18 pts lower ($30.78), March 17 pts lower ($31.25) & July 12 pts lower ($31.82)

USDA announces 135.0 K T. of soybean meal sold to Philippines

Weekly Soybean Export Inspections – 1.568 M T. vs. 900 K – 1.300 M T. expected

Weekly Soybean Crop Progress – Dropping Leaves – 97% vs. 99% 5-year average – Harvested – 62% vs. 62% expected vs. 78% 5-year average

If today’s slightly higher price action in soybeans was an effort to reverse Friday’s suggested interim sell signal it was a total failure. Granted weekly export inspections came in higher than expected it did very little in offsetting the absence of any new Chinese buying. Early last week the trade got geared up for a new round of Chinese buying after it was announced they would remove the tariffs on 10.0 M T. of US soybeans for its state owned crushers, privately owned crushers and international crushers that do business in China. So far what they have bought (not much) has done little to offer any encouragement to the bullishly inclined. The soybean meal remains in a trading range affair but continues to favor the low side of the suggested range, $300.0 to $315.0 (Dec). From Friday’s high to today’s low Dec soybean oil has moved 90 pts. For what it is worth bean oil did register a minor downside reversal on Friday; new highs for the move while closing lower.

The interior soybean basis continues to run steady to higher. At locations where the processor has to compete with the exporter the basis is the strongest. Board crush margins remain nothing to write home about but they do appear to be stabilizing after months of trending lower. The Gulf basis for soybeans continues to be firm albeit slightly easier from late Friday’s posting. Soybean spreads continue to show a widening bias. Thursday is 1st Notice Day for November soybeans; that explains the Nov/Jan spread approaching a 15 cent carry. The interior soybean meal basis is such that it still suggests it is looking for buyers and not really finding any. The Gulf basis for soybean meal is steady but not to the point it is suggesting any new demand. Meal spreads ran fractionally softer on the day.

As long as China remains absent from the US soybean market prices will be biased to move lower. As of this writing the best looking near term for Jan beans is $9.32 to $9.28. Resistance starts at the mid-$9.40’s; the level that featured sell stop activity on Friday. Over the past 2 ½ weeks the spec/managed money got net long soybeans. Given today’s close they don’t have much to show for their first net long soybean positions dating back to June of 2018.

Daily Support & Resistance for 10/29

Jan Soybeans: $9.33 ($9.28) – $9.45

Dec Soybean Meal: $301.5 – $308.5

Dec Soybean Oil: $30.45 – $31.15

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.