Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 1 ½ cents higher ($9.25 ¾), March 2 cents higher ($9.51 ¼) & July 2 ¾ cents higher ($9.73 ½)

December Soybean Meal closed $1.5 lower ($302.4), March $1.5 lower ($308.4) & July $1.4 lower ($316.1)

December Soybean Oil closed 84 pts higher ($31.87), March 82 pts higher ($32.09) & July 82 pts higher ($32.95)

Weekly Soybean Export Inspections – 1.480 M T. vs. 850 K – 1.500 M T expected

Weekly Soybean Crop Progress – Harvested – 75% vs. 75% expected vs. 87% 5-year average

If one reads the commodity news wires they will tell you soybeans were higher on Monday due to what appears that both China and the US are moving closer to get their “Phase 1” trade agreement signed later this month. Personally I think the majority of today’s minor gains were due to the fact that soybean oil was up nearly $500 per contract. Soybean oil continues to get its strength from a screaming higher palm oil market. As far as I’m concerned its all about veg oil demand for bio-diesel. Weekly soybean export inspections live up to the trades’ expectations. The current pace of inspections is now 900 K T. better than last year but unfortunately that’s not saying a whole lot given the heightening trade war that was developing one year ago. Soybean meal continues to be the “dog” of the complex as inter-market spreading (buying bean oil/sell bean meal) keeps this market under wraps.

The interior soybean basis has a mixed look to it on Monday. Decatur, IL rolls from Nov to Jan with a 5 cent spread, Decatur, IN rolls at a 10 cent spread. River locations continue to read better. The Gulf rolls at a 9 cent to 13 cent spread. The Jan forward soybean spreads were soft all the way out to August. For what it is worth; JP Morgan has stopped all of the Nov soybean deliveries. We believe they represent Cargill. Whoever this entity is they now own 1761 of the 1769 soybean delivery registrations. What do they know that we don’t?

Strength in soybean oil keeps the soybean market alive. The Jan soybean chart shows prices upflagging back up towards the resistance that was created on October 25th. The last interim high we saw for nearby soybean oil on the weekly charts was $32.05 in May of 2018. The daily Dec bean oil chart shows a double top high against $32.05, $32.06 that was registered in February of 2018. Last week’s downside correction measures to $32.50. Dec soybean meal continues to have problems straying too far away from the $300.0 suggested support level. For as strong as soybean oil looks soybean meal looks that weak. The strength in soybean oil may allow soybeans to test the resistance that was created a week ago but without soybean meal rallying out of the hole I doubt it can do much better than just resistance testing.

Daily Support & Resistance for 11/05

Jan Soybeans: $9.31 – $9.44

Dec Soybean Meal: $301.0 – $306.5

Dec Soybean Oil: $31.40 – $32.06 (?)

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.