Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed ½ cent higher ($8.80), July 1 cent higher ($9.07 ¼) & Nov 2 cents higher ($9.20 ¼)

March Soybean Meal closed $1.1 lower ($287.4), July $0.8 lower ($298.4) & Dec $0.9 lower ($306.3)

March Soybean Oil closed 59 pts higher ($31.32), July 57 pts higher ($32.05) & Dec 52 pts higher ($32.69)

Weekly Soybean Export Sales – old crop vs. 400-800 K T. expected d- 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. 12-60 K T. expected – new crop vs. none expected

Soybean oil continues to rebound fueled by a resurgent palm oil market. Soybean meal continues stagnate as it hovers just above recent contract lows. In the night session the soybean market tried to trade with the rebounding soybean oil but with the meal market continue to dog it the rally in soybeans quickly faded. Adding the inability of the soybean market to hold the rally is word out of Brazil that China has bought nearly 1.0 M T. from them this week. People ask about Phase One; where is the buying that’s supposed to go with that? Number one is that Phase One doesn’t officially kick in until February 15th and Number two is that China continually said during the Phase One talks they would buy according to market conditions. Right now “market conditions’ heavily favor Brazilian origin.

The interior soybean basis continues to hold firm as processors show the best basis levels. River basis locations are also starting to show some sparks. I have to think this is all about slow producer selling not market making demand. The Gulf is steady vs. the past four days. Soybean spreads offer no bullish enthusiasm whatsoever. Offers to sell cash soybean meal in the interior run unchanged. “They” talk about good demand from both the domestic and export sectors yet meal spreads continue to show a steady to widening bias.

Flat price soybeans barely tap at recently established minor resistance and turn tail. Renewed strength in soybean oil can barely keep the soybean market alive because the meal market continues to be a major dog. Wishful thinking has the soybean meal market trying to develop some sort of a bottom but it too fails to sustain attempts to rally out of the hole. Failure to see market making export sales (above expectations) tomorrow morning will easily influence prices lower for soybeans and soybean meal.

Daily Support & Resistance – 2/06

March Soybeans – $8.70 – $8.90

March Soy Meal – $285.5 (?) – $292.0

March Soy Oil – $30.70 – $32.00

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.