March Soybeans closed 13 ½ cents lower ($9.28 ¾), July 13 cents lower ($9.54 ¼) & Nov 10 ¾ cents lower ($9.58 ¾)
March Soybean Meal closed $1.9 lower ($300.1), July closed $1.6 lower ($309.4) & Dec unchanged ($315.0)
March Soybean Oil closed 77 pts lower ($33.30), July 75 pts lower ($34.01) & Dec 71 pts lower ($34.36)
USDA announces 126.0 K T. old crop soybeans sold to China
NOPA December Crush – 174.812 million bu. vs. 171.664 expected – Soybean Oil Stocks – 1.757 billion lbs. vs. 1.507 billion expected
Weekly Soybean Export Sales – old crop vs. 400-800 K T. expected – new crop vs. 0-50 K T. expected
Weekly Soybean Meal Export Sales – old crop vs. 75-250 K T. expected – new crop vs. none expected
Weekly Soybean Oil Export Sales – old crop vs. 0-25 K T. expected – new crop vs. none expected
The trade accord has been signed and the lack of specific details coupled with China saying they will buy according to market conditions has the soybean market heading south. As of this writing the spread between Brazil origin and US origin is running anywhere from 30-40 cents. Who are you going to buy with that kind of spread? Brazilian harvest is just getting underway and yields are barely short of great. If I had to guess the majority of the Chinese buying of US soybeans will come later in the year when Brazilian discounts to the US tighten. The NOPA crush data was great for soybeans but terrible for bean oil and soybean meal was caught in the middle.
The interior soybean basis runs unchanged to ever so slightly higher. The Gulf maintains its recent firm tone. Soybean spreads showed a bearish bias all the way to the new crop reflecting the upfront selling. The interior soybean meal basis continues to smell bad. The Gulf basis for soybean meal is not much better. The strong rate of crush will do that. Meal spreads ran the route of the soybean spreads; bearish out to the new crop.
Yesterday I wrote the bulls would not want to see closes below $9.35 (March). So what do they do now? I can tout you some technical support levels at $9.22 and again at $9.15. Given tonight’s close these possible technical support levels seem to be self-fulfilling prophecies. Soybean meal is still in its minor trading range but tonight’s close in the March contract is the lowest we’ve seen dating back to Dec 12th. March bean oil closing below the $33.50 mark suggests something closer to $33.00 if not $32.50.
Daily Support & Resistance for Jan 16th
March Soybeans: $9.22 – $9.36
March Soybean Meal: $297.5 – $302.5
March Soybean Oil: $32.90 – $33.75
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