March Soybeans closed 2 cents lower ($8.93), July 1 ½ cents lower ($9.20 ¾) & Nov 1 cent lower ($9.29 ½)
March Soybean Meal closed $1.5 lower ($296.1), July closed $1.4 lower ($304.8) & Dec $1.4 lower ($310.9)
March Soybean Oil closed 6 pts higher ($31.52), July 4 pts higher ($32.25) & Dec 6 pts higher ($32.69)
Weekly Export Soybean Sales – old crop vs. 400 K – 1.000 M T. expected – new crop vs. 0-100 K T. expected
Weekly Soybean Meal Export Sales – old crop vs. 200-500 K T. expected – new crop vs. none expected
Weekly Soybean Oil Export Sales – old crop vs. 8-40 K T. expected – new crop vs. none expected
Ideas of a short term oversold lends support Tuesday, early Wednesday and then reality sets back in. What’s the “reality”? Brazil is starting to harvest a record size soybean crop. When the Phase One trade accord was signed earlier this month China said they will buy soybeans based on “market conditions”. As far as I’m concerned “market conditions” mean where are the cheapest soybeans. As of this writing the cheapest soybeans are in Brazil. The discount between the US and Brazil is almost extreme and it’s in Brazil’s favor. Soybean oil is trying to catch some support after the past 3 weeks of a near 500 pt correction. Granted a lot of the bearish influence came from the unknown around the coronavirus and how it will impact the global veg oil trade. On Tuesday palm oil had its worst daily performance dating back more than 10 years. I think that was an indication of just how overloaded this market was on the long side. I believe cooler heads are now trying to prevail. The soybean meal market struggles to get anything going on the upside despite what appears to be an improving export market.
The interior soybean processor market can be described as surging higher. The interior river markets appear mixed. The export market can be described as fully steady at recent highs. Soybean movement appears to be minimal at best as I get the idea the producer is willing to wait for some Chinese business. It’s my opinion he is going to have wait a long time. Soybean spreads within he current crop year continue to show a widening bias. The interior soybean meal basis is trying to show signs of support as I’m beginning to see some scattered improvement. The Gulf basis for soybean meal can be called “strengthening”. For most the most part soybean meal spreads run steady to fractionally easier led by the nearby.
Tomorrow is export sales day. I’m not holding my breath on market making soybean sales but I am thinking we can see solid looking product sales. Soybean Oil charts are trying to suggest the 500 pt correction may have run its course. Soybean Meal continues to struggle to get anything going on the upside as the downside continues to act as a magnet whenever this market tries to poke its head up. As far as I’m concerned March soybean meal needs to see closes above $301.0-$302.0 just to “steady” the market. For the time being March soybeans should realize support in the $8.90-$8.80 range. The upside for soybeans should remain limited for the time being.
Daily Support & Resistance for Jan 30th
March Soybeans: $8.86 – $8.99
March Soybean Meal: $294.0 – $299.0
March Soybean Oil: $31.05 – $32.00
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