Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed 2 ½ cents higher ($8.93), July 2 ¾ cents higher ($9.13 ½) & Nov 1 ½ cents higher ($9.19 ¼)

March Soybean Meal closed $1.6 higher ($303.8), July $0.8 higher ($314.1) & Dec $0.3 lower ($317.5)

March Soybean Oil closed 27 pts higher ($28.84), July 24 pts higher ($29.50) & Dec 21 pts higher ($30.30)

Soybeans and soybean meal extend their recent rally into Tuesday but to a much lesser extent. Soybean oil tries to bounce but in the lower 50% of the day’s range. The Brazilian harvest continues to move along. There is some fear that recent dryness may impact their late planted soybeans. Argentine appears to be in good shape for now while forecasts for warm and dry call for some monitoring as a good portion of their soybean crop is going through the pod-filling stage. Today was the first day China was going to entertain import duty free waivers on US soybean exports. I have not heard of any business coming from this. Even without import duties on US soybeans China can buy much cheaper in Brazil. I’m told the US is not competitive with Brazil until October, November. The Argentina government has decided not to raise the export duties on soybean products, only soybeans.

Soybeans continue to be a tough purchase in the US interior. This has worked to keep most soybean basis levels firm. The Burns Harbor basis drops 9 cents after 1000 contracts against March soybeans were delivered out of the “Chgo” location. The Gulf holds firm. Soybean spreads ran mixed within the old crop while old crop gains on the new crop. Because soybeans are a tough purchase in the US interior most processor locations are steady to firm with their offers to sell cash soybean meal. Export offers are also extending higher. Bull spreads in soybean meal were working all the way out through the new crop.

As far as I’m concerned the recent rally in soybeans has been all about the meal market. Since recent lows old crop soybeans have rallied nearly $1500 a contract while the soybean meal rally has been nearly $2000 a contract. Because of the politics in Argentina impacting their production of soybean meal has brought some better business to the US.  I would like to think the meal market, as well as the soybean market, are knocking at the door of some significant resistance. I would be very hesitant to chase the current rally. Despite my hesitancy to chasing the current rally If we do start to hear of Chinese soybean buying the spec short covering will continue. Soybean oil can’t get anything going because of its ties to the palm oil market. Palm oil continues to languish as it is caught up in the Covid-19 fears which has been leading to lower disappearance.

Daily Support & Resistance – 3/04

July Soybeans – $9.04 – $9.21

July Soy Meal – $309.0 – $318.0

July Soy Oil – $29.00 – $30.00

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.