Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 10 cents higher ($9.25), March 8 cents higher ($9.48 ¾) & July 7 ½ cents higher ($9.70 ¾)

December Soybean Meal closed $6.7 higher ($305.6), March $6.1 higher ($311.0) & July $5.0 higher ($317.9)

December Soybean Oil closed 32 pts lower ($31.43), March 31 pts lower ($31.91) & July 31 pts lower ($32.50)

Weekly Soybean Export Sales – 1.807 M T. old crop vs. 600 K – 1.200 M T. expected – no new crop vs. none expected

Weekly Soybean Meal Export Sales – 262.5 K T. old crop vs. 150-300 K T. expected – no new crop vs. none expected

Weekly Soybean Oil Export Sales – 3.9 K T. old crop vs. 5-25 K T. expected – 0.1 K T. new crop vs. none expected

USDA announces 136.0 K T. of soybeans sold to China & 133.0 K T. of soybean meal sold to Philippines

It seems that both China and the US are agreeing to roll back tariffs if and when a trade deal can be made. Supposedly this will be done in phases; equal amounts on both sides. Where and when the possible deal will be signed off on remains up in the air; the latest idea is in London after a NATO meeting on Dec 6th & 7th. Weekly export sales of soybeans were nothing short of excellent. Soybean meal sales were deemed as “solid”. The USDA daily announcements of meal and soybeans export sales add to the day’s support. I’m not sure who led who (soybeans or soybean meal) out of the recent hole. A trade deal with China would assure additional soybean exports. China does not import that much soybean meal due to their crush capacity but it is thought that in recent weeks soybean meal stocks there are at two year lows.

The interior soybean basis continues to be quite strong looking with one exception; Savanna, IL is 4 cents weaker. The Gulf continues to grind higher. Cash soybean movement remains slight at best. Soybean spreads strengthened all the way out to the new crop. The soon to expire November with its lack of recent deliveries and Cargill now owning 99% of the previous deliveries is finally starting to buoy the spread tighter. Offers to sell cash soybean meal in the interior appear to be knee-jerking higher. Offers to sell cash meal at the Gulf have been inching higher for the past few days. Meal spreads firmed with the better basis along with the flat price’s spurt higher.

In recent weeks the spec money has been on the long side of the soybean market. I don’t know if the USDA will prove their point with tomorrow’s production and supply-demand update. If we are indeed getting closer to a deal with China I can’t imagine anyone wanting to be short. Soybean charts appear to be in limbo; meaning they could go either way. Soybean meal charts show some pretty decent support below the $300.0 level. Bean oil charts remain strong looking with some shorter term downflagging. If the soybean data from the USDA is bearish looking I have to think the trade will buy the break as long as they think we are getting close to a deal with China.

Daily Support & Resistance for 11/08

Jan Soybeans: $9.25 ($9.20) – $9.48 ($9.55)

Dec Soybean Meal: $301.0 – $309.0 ($312.0)

Dec Soybean Oil: $31.00 – $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.