Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 14 ½ cents lower ($9.05), March 13 ½ cents lower ($9.30 ½) & July 12 ½ cents lower ($9.53 ½)

December Soybean Meal closed $4.3 lower ($300.6), March $4.1 lower ($305.7) & July $3.5 lower ($312.4)

December Soybean Oil closed 8 pts lower ($31.42), March 9 pts lower ($31.89) & July 10 pts lower ($32.46)

Weekly Soybean Export Inspections – Delayed until Tuesday, Nov 12th

Weekly Soybean Crop Progress – Delayed until Tuesday, Nov 12th

Needless to say the trade was leaning the wrong way in trying to estimate what the USDA would say on Friday. All of the supply data was left unchanged vs. lower ideas. Demand (crush) was cut by 15 million bu. increasing the carryout by a like amount vs. the idea that the carryout would decline by 32 million bu. As far as the US/China trade agreement is concerned it’s anyone’s guess as to its outcome and when it could be signed. It seems for every positive that’s mentioned about the trade talks here comes a negative. As we move forward the trade will continue to focus on the ongoing trade talks as well as the growing conditions of the SA crop. Brazil got off to a slow start to planting but in recent days has caught up and needed rains are occurring. Argentine soybean planting is just getting underway.

The interior soybean basis runs similar to that of corn; the overall trend is firm but every now and then we see some selected easing. The Gulf continues to edge higher. Soybean spreads were easing today led by the soon to expire November. Another 200 beans were registered for delivery and delivered. Cargill’s recent stopping of Nov beans appears to have run its course as they redelivered 655 of the 1764 they previously stopped. This latest round of deliveries, 855, saw no stoppers of note. Offers to sell cash meal are holding onto to last week’s firming but did little to support today’s soybean meal spreads. One has to remember that the majority of the day to day volume is primarily in the nearby contracts so when we see a day of flat price extremes it tends to influence the spreads no matter what the cash markets are doing.

Has the recent flat price break attracted any new Chinese buying? Today the USDA was closed so no daily announcements. The word is that China is indeed probing both the Gulf market and the PNW market for soybeans. I see a smattering of technical support at the $9.15 level (Jan); much better below the $9.10 level. $9.25 to $9.30 is now new minor resistance. Last week Dec meal traded below the $300.0 level and bounced out of there the next day. If sub-$300.0 is indeed support I doubt we see much follow through from today’s sloppy looking performance.

Daily Support & Resistance for 11/12

Jan Soybeans: $9.10 – $9.27

Dec Soybean Meal: $299.0 – $305.0

Dec Soybean Oil: $31.00 – $31.80

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.