Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed ¾ cent higher ($9.16 ¾), March 1 ¾ cents higher ($9.45 ¼) & July 2 cents higher ($9.67 ¼)

December Soybean Meal closed $2.2 higher ($304.4), March $2.0 higher ($310.5) & July $1.9 higher ($318.1)

December Soybean Oil closed 23 pts lower ($30.75), March 23 pts lower ($31.25) & July 18 pts lower ($31.86)

Weekly Soybean Export Sales – 943.6 K T. old crop vs. 500 K – 1.100 M T. expected – no new crop vs. none expected

Weekly Soybean Meal Export Sales – 179.1 K T. old crop vs. 100-250 K T. expected – 0.4 K T. new crop vs. none expected

Weekly Soybean Oil Export Sales – 30.0 K T. old crop vs. 0-24 K T. expected – 0.2 K T. new crop vs. none expected

The rhetoric around the China/US trade talks continues to go both ways. The US continues to suggest both sides are working to complete the suggested “Phase 1” deal. China stills says they will buy when commodities are needed and not before. There was also a suggested comment that China doubts a “long term” trade deal can be reached. Weekly export sales continue to be solid looking but still no announced daily sales. Weather forecasters are suggesting that the recent poor weather for harvesting will be clearing by next week and should remain clear as we move into mid-November. All of this had soybeans grinding into suspected support levels in the early part of the day session. Buying appeared when the meal market started rallying. Anyone trying to be bullish soybeans loves it when soybean meal leads higher.

The interior cash soybean market (basis) continues to see river locations move higher. The large deliveries did have a negative influence in the early part of the day session but spread losses were kept to a minimum. The Gulf holds onto its recent strength. Jan forward soybean spreads only saw fractional losses. Not much new happens with the meal basis; interior offers still suggest demand is not the best. Board crush margins are trying to suggest the recent declines have probably run their course. Meal spreads saw fractional improvement.

Given where the flat price of soybeans and soybean meal traded in the early part of the session vs. where they closed I thought it suggests we may have gone low enough for the near term. I’m not suggesting the break is over its just time to do some backing and filling of the recent sell-off. Next Friday, the 8th, the USDA will update production and supply-demand. It is my thought the market will not be on the defensive going into this report; no worse than a middle of the road look. Tomorrow is the first day of a new month. I would not be surprised to see some fresh new buying; steady at worst.

Daily Support & Resistance for 11/01

Jan Soybeans: $9.28 – $9.37

Dec Soybean Meal: $302.5 – $309.0

Dec Soybean Oil: $30.50 – $31.10

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.