Soybeans Commentary


Soybeans – Just My Opinion

January Soybeans closed 7 cents higher ($8.78), March 7 cents higher ($8.92 ½) & July 6 cents higher ($9.20)

December Soybean Meal closed $2.1 higher ($294.6), March $1.7 higher ($299.6) & July $1.0 higher ($305.8)

December Soybean Oil closed 28 pts higher ($30.27), March 27 pts higher ($30.76) & July 25 pts higher ($31.41)

USDA announces 20.0 K T. of soybean oil sold to Morocco

Weekly Soybean Export Sales – old crop vs. 700 K – 1.300 M T. expected – new crop none expected

Weekly Soybean Meal Export Sales – old crop vs. 100-300 K T. expected – new crop vs. none expected

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

Overnight rhetoric suggests the US and China are closer to a trade deal (this is from “people familiar with the situation”) vs. what was alluded to yesterday.  There is also the thought that China may have purchased a couple of US soybean cargoes in the last day or so (all the while still inquiring for Brazilian origin). These two items coupled with the current degree of oversold had soybeans maintaining the plus side all day long. The product markets also enjoyed higher prices on the day; meal saw its gains from short covering and soybean oil reacted to the USDA export sale announcement as well as higher palm oil prices.

The interior cash soybean market runs mostly unchanged on the day. There were a couple of river locations that have eased slightly. Processors across the Midwest show the best basis. The Gulf basis for soybeans is mostly steady; bids easier, offers higher. Soybean spreads had a bit of bullish bias which I think was tied to the short covering. Rail soybean meal offers are easier. Truck soybean meal offers run steady to better.  Offers to sell soybean meal at the Gulf are easing. Despite the “mixed” offers for soybean meal bull spreads had a slight bias on Wednesday which is tied to the flat price short covering.

Tomorrow is export sales day and ideas suggest the recent run of big sales will be slowing down. Overnight rhetoric around trade talks will hold sway as well just as they did today. So far all I am seeing is a slight rally in a bear market. Today’s rally took the 14-day RSI from 19 to 28 in January soybeans.

Daily Support & Resistance for 12/05

Jan Soybeans: $8.71 – $8.85

Jan Soybean Meal: $294.0 – $299.0

Jan Soybean Oil: $30.00 – $30.90

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.