Soybeans Commentary

storck

Soybeans – Just My Opinion

January Soybeans closed 8 ¼ cents lower ($8.84 ¼), March 8 ¼ cents lower ($8.98 ¾) & July 7 ¼ cents lower ($9.26)

December Soybean Meal closed $3.6 lower ($294.7), March $2.9 lower ($300.6) & July $2.5 lower ($308.2)

December Soybean Oil closed 22 pts lower ($30.22), March 19 pts lower ($30.69) & July 16 pts lower ($31.38)

It was another lower day for the soybean complex. Today’s trade in soybeans was a bit different from recent days; instead of dribbling lower all day prices shot lower on the reopening. Once the day’s lows were made I think the best bounce we saw was maybe 3 – 3 ½ cents. It was a similar trade in soybean meal; their rationale for lower prices was 1st Notice Day liquidation. Soybean oil too traded lower but it was due to a healthy correction in the palm oil market. Soybean oil deliveries are expected to favor the light side given its ongoing demand for bio-diesel. I’m told the Brazilian soybean producer is looking at the best prices he has seen in years. This is a result of their great export program along with the lower real. As far as the Brazilian new crop is concerned there are no weather worries at this point in time. Argentine growing conditions appear okay for now. There is some fear of dryness developing over the near term.

The interior soybean basis continues to show a firm bias. There are some river locations that flip-flop back and forth. The processor continues to show the best basis and no signs of backing off. The Gulf stands in not far off of recent highs; maybe off 7-10 cents. Soybean spreads continue to stay under pressure in part to strong Brazilian selling. Offers to sell cash soybean meal in the US saw some easing today both in the rail market and the truck market. Offers to sell cash meal at the Gulf run unchanged with recent strength. Soybean meal spreads continue to widen.

On November 2nd Jan soybeans closed at $9.38; its been downhill ever since. When soybeans broke hard out of the box this morning I thought we were setting the stage for some exhaustion to the downside. Unfortunately the rejection never came. After being down 50 plus cents over three weeks’ time one might think the flat price is oversold; the 14-day RSI for Jan beans sits at 23.7. We’re getting close but not quite there as I use under 20 as a point to start watching. As a point of reference; back in May of this year soybeans registered an 11.7 for a 14-day RSI. Soybean meal is nowhere near as weak in technical terms. Soybean oil appears to be in a corrective phase with support suspected as we near $30.00.

Daily Support & Resistance for 11/27

Jan Soybeans: $8.80 ($8.75) – $8.95

Jan Soybean Meal: $294.5 – $301.0

Jan Soybean Oil: $30.00 – $31.00

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.