Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed 4 ¼ cents lower ($9.09 ½), July 4 ¼ cents lower ($9.37) & Nov 3 cents lower ($9.47 ¼)

March Soybean Meal closed $1.0 higher ($298.9), July closed $0.8 higher ($307.7) & Dec $1.2 lower ($314.1)

March Soybean Oil closed 54 pts lower ($32.48), July 52 pts lower ($33.18) & Dec 52 pts lower ($33.56)

Weekly Export Soybean Sales – old crop vs. 600 K – 1.100 M T. expected – new crop vs. 100-200 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 200-450 K T. expected – new crop vs. none expected

Weekly Soybean Oil Export Sales – old crop vs. 5-26 K T. expected – new crop vs. none expected

A lack of Chinese business coupled with Brazil harvest starting explains it all – today’s lower prices. China has said all along they will buy according to “market conditions”. Right now “market conditions” suggest anyone interested in buying soybeans will go to Brazil. I’m told the spread between the US and Brazil is about 40 cents Brazil discount). Early harvest returns in Brazil suggest yields could surpass those seen last year. Couple that with increased acreage it could easily suggest the Brazilian soybean crop will surpass the most recent estimates of 123.0 M T. Soybean oil continues to be in a liquidation mode and that in turn gives the meal market a minor bump. The bump in soybean meal is so minor that today’s low in March meal came within $0.5 of the contract low.

With the exception of Savanna, IL being down 2 cents all other interior locations for cash soybeans (basis) read steady to higher. The export basis too reads steady to higher. Soybean spreads ran steady out to August and then eased vs. the new crop. The July/Nov spread is the lowest it has been since early December. The interior soybean meal basis is quiet with no real feature. The export market for meal is showing signs of trying to improve. Meal spreads ran fractionally better out to September but then lost ground to the new crop.

How low can you go or should I say how low will you go? I show an interim low for March soybeans at $9.02 ½. After that we look at something closer to $8.90. For what it is worth March meal did register a minor interim reversal today; a new low for the current break while finishing higher on the day. If you believe the soybean market has gone low enough you will want to see the meal market start to perform. As far as the liquidation in bean oil is concerned I’m thinking there is probably no more that 50 pts left on the current break.

Daily Support & Resistance for Jan 24th   

March Soybeans: $9.02 ½ – $9.18

March Soybean Meal: $295.5 – $302.0

March Soybean Oil: $32.10 – $33.00

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