Soybeans Commentary

storck

Soybeans – Just My Opinion

March Soybeans closed 6 ¼ cents higher ($9.11), July 7 ¾ cents higher ($9.37 ½) & Nov 5 ¾ cents higher ($9.54 ¼)          

March Soybean Meal closed $0.7 higher ($305.9), July $0.7 higher ($313.8) & Dec $0.4 higher ($320.2)

March Soybean Oil closed 53 pts higher ($30.49), July 54 pts higher ($30.95) & Dec 53 pts higher ($31.75)

USDA Outlook Forum – Soybeans 2019/20 – 85.0 million planted acres vs. 89.2 last year vs. 86.144 million expected

Weekly Soybean Export Sales (Jan 4th to Feb 14th) – old crop 6.000-9.000 M T. expected – new crop vs. 100-600 K T. expected

Weekly Soybean Meal Export Sales (Jan 4th to Feb 14th) – old crop vs. 500 K – 1.500 M T. expected – new crop vs. none expected

Weekly Soybean Oil Export Sales (Jan 4th to Feb 14th) – old crop vs. 40-80 K T. expected – new crop vs. none expected

The USDA suggests at their Outlook Forum planted soybean acres this coming year will be 85.0 million acres. This is about 1.1 million less than what the trade was looking for but 2.5 million greater vs. what was outline in November. Back in November a yield projection of 50.0 bpa was used. If the acreage projection is true crop size could be down by as much 250 million bu. The number is mildly supportive but being modestly offset by production projections out of SA as well as the possible higher carryin. The bigger news item was the China proposal (if a deal is agreed upon) buying an additional $30 billion of US Ag goods. This proposal on their part has to be related to previous discussions as to how China can reduce the imbalance of trade with the US. The numbers we’ll look at tomorrow will be the USDA’s outlined Supply-Demand table for the new crop as well as the “catch-up” weekly export sales data.  

Not much happens with the interior processor basis. River basis levels continue to follow the recent higher trend. The Gulf basis is showing its best levels in I can’t remember how long. Soybean spreads showed a bullish bias all the way out to the new crop. Offers to sell cash meal run unchanged at recent low levels whether for domestic use or for export. Meal spreads had a very minor bullish bias today.

So – how long will the trade hang on to today’s China optimism? Will tomorrow’s weekly export sales “catch-up” report suggest no further cuts to this year’s export projections? I was a bit disappointed that the meal market dogged it today. You all know my feelings about a doggy meal market when soybeans are trying to sustain a rally. For what it is worth daily momentum indicators on soybeans are trying to turn higher after our three weeks of edging lower. Those same indicators are flat near the low end as the meal market continues to hold recent lows. Bean oil indicators are turning back higher after its recent 1 ½ weeks of correction. It looks like volatility is coming back to the soybean complex so reactions to whatever the USDA may have say along with the what the rumor mill may have to say as to the ongoing China/US trade talks will lead to some sharp quick moves; sharper and quicker vs. what we have seen in recent weeks.

Daily Support & Resistance for 02/22

Mch Soybeans: $9.02 – $9.25

Mch Soybean Meal: $304.0 – 311.0

Mch Soybean Oil: $30.00 – $31.00 ($31.50)

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