January Soybeans closed 4 ¾ cents higher ($8.98 ¼), March 4 ½ cents higher ($9.12 ½) & July 3 ¾ cents higher ($9.38 ¾)
December Soybean Meal closed $0.7 lower ($292.6), March $0.6 lower ($298.7) & July $1.1 lower ($306.3)
December Soybean Oil closed 80 pts higher ($32.03), March 80 pts higher ($32.51) & July 79 pts higher ($33.09)
Weekly Soybean Export Sales – 1.050 M T. old crop vs. 500 k – 1.100 M T. expected – 125.0 K T. new crop vs. none expected
Weekly Soybean Meal Export Sales – 238.5 K T. old crop vs. 125-300 K T. expected – 19.1 K T. new crop vs. none expected
Weekly Soybean Oil Export Sales – 29.9 K T. old crop vs. 8-30 K T. expected – 0.3 K T. new crop vs. none expected
The big news of the day was Washington tweeting they are getting very close to a big deal with China. Adding to that was a story out of the WSJ citing US negotiators offering to cut existing tariffs on $360 billion in Chinese goods by 50% and suspend tariffs due to go into effect on the 15th. The WH had no comment on this story. Initially the entire complex moved sharply from its lows. Soybean meal could not hold the rally and wound up finishing with small losses on the day while soybean oil maintained sharp gains aided by a rebound in palm oil prices. It is my thought the soybean market did not do better than it did is due to ideas that the window for future export sales to China is only about 2 months wide as export sales from Brazil should take over beginning mid late February.
The interior soybean basis from processors remains strong. The interior river basis appears to be easing just a touch. The Gulf basis remains strong. The nearby soybean spreads were strong as it is believed that the recent Chinese business is to be shipped now. The interior soybean meal basis sees minor strength in only selected locations. No change is seen with gulf meal basis. Despite the flat price finishing lower meal spreads saw fractional improvements.
After the close Bloomberg News announced that the US has reached a trade deal in principle with China; just waiting for the President to sign off on it. Details are unknown at this time. Given today’s price performance Jan soybeans appear geared up to challenge the $9.10-$9.15 resistance level followed by something closer to $9.25-$9.30. Jan meal challenges last week’s contract low ($292.6) and it manages to hold. Upside potential for soybean meal will remain muted as long as bean oil continues to be a high-flying affair. The weekly bean oil chart remains impressive looking as prior to this week it had been downflagging and this week’s opening represents a gap higher out of the downflag. $32.00 has been a resistance level dating back to May of 2018. The December bean oil contract goes off the Board tomorrow and January will take over. If Jan is still above the $32.00 level by tomorrow’s close the next upside target will be something closer to $34.00. As far as I’m concerned bean oil has its own story (palm oil & bio-diesel demand) without a China deal.
Daily Support & Resistance for Dec 13th
Jan Soybeans: $8.92 – $9.10
Jan Soybean Meal: $292.5 – $298.0 ($300.5)
Jan Soybean Oil: $31.80 – $33.00
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.