March Soybeans closed 16 ¼ cents lower ($8.74 ¼), July 15 ¾ cents lower ($8.94) & Nov 12 ½ cents lower ($9.05)
March Soybean Meal closed $3.1 lower ($286.1), July $2.2 lower ($297.9) & Dec $1.1 lower ($304.9)
March Soybean Oil closed 115 pts lower ($29.49), July 112 pts lower ($30.26) & Dec 102 pts lower ($31.08)
USDA announces 163.3 K T. of soybeans sold to Mexico
Weekly Soybean Export Inspections – 594.5 K T. vs. 600 K – 1.100 M T. expected
It’s called “risk-off” due to the continued spread of Covid-19 (aka the coronavirus). The fear is that if the virus continues to spread it will hit the global economy/global trade. Weekly export inspections were deemed disappointing vs. expectations. Harvest continues to roll along in Brazil with excellent yields being found in the north, northeastern reaches. Yields further south into RGDS are not expected to be as good due to earlier dry conditions. Still Brazil is expected to have a phenomenal crop. Given where current cash prices stand the US will not be competitive with Brazil until much later this year. The Argentine government just announced they are tacking on another 3% to its soybean complex exports. I can’t help but think that will not fly with its farm community but the only way they can combat that is to withhold soybean sales. I do think the soybean meal market got a bit of a boost from that news today despite still finishing lower. Veg oil takes the biggest hit as it is a “food” product.
The interior soybean basis runs mostly steady with just a few minor changes. The Ohio River is 1 cent better, Savanna, Il 1 cent easier and Davenport, IA 1 cent better. The Gulf is steady with recent high postings. Soybean spreads, May forward, ran lower on the day in response to the spec selling. Cash movement from the producer remains minimal as he continues to hold out to see some Chinese buying in regards the completed Phase One deal (good luck with that). The interior soybean meal basis holds on to recent gains while the export basis is no better than steady. Board crush margins continue to ease which in turn should keep the processor basis steady with last week’s gains. 1st Notice day will be with us on Friday. There are currently 131 soybean contracts registered for delivery. Will the commercial smell some Chinese business on the horizon? This will dictate how many deliveries we see.
You don’t need me to tell you just how ugly the price action is throughout the complex. Soybeans and soybean meal flagged higher for the first three weeks on February and now they are rolling over. Soybean oil takes the biggest hit due to the spreading of the Covid-19 virus as it is a food product. Tomorrow’s activity will continue to take its cue from the headlines involving the virus. For what it is worth the midday attempts to rally the soybean and soybean meal markets have alleviated some of the short term oversold. Daily technical indicators do not read oversold. As of this writing if the complex is going to hold we’ll need to see Chinese buying; without it we’ll continue to move lower.
Daily Support & Resistance – 2/25
May Soybeans – $8.75 ($8.65) – $8.89
May Soy Meal – $289.0 – $294.0
May Soy Oil – $29.50 (?) – $30.20
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