March Soybeans closed 19 ¾ cents lower ($8.63 ½), July 21 cents lower ($8.79) & Nov 19 ¼ cents lower ($8.86 ¼)
March Soybean Meal closed $4.7 lower ($296.6), July $4.7 lower ($304.7) & Dec $3.4 lower ($309.5)
March Soybean Oil closed 117 pts lower ($27.31), July 120 pts lower ($27.90) & Dec 109 pts lower ($28.75)
USDA announces 123.5 K T. of soybeans sold to unknown
Weekly Soybean Export Inspections – 572.4 K T. vs. 500-800 K T. expected
Soybeans could not overcome the bearish effects from the continued spiral lower in equities as well as the carnage in energies. Soybean oil was the weakest of the products as it gets doubled whammied from both the equity market (virus inspired) and the sharp drop in energy prices. Soybean meal tries to perform but fails to buoy soybean prices. The end result was a decline in Board crush margins. Adding insult to injury is the continued aggressive selling of the Brazilian new crop. The Brazilian currency continues to sewer lower. The Brazilian producer sells his product in US Dollars so when the Real is moving lower against the US Dollar that means higher prices for his soybeans. Tomorrow’s USDA supply-demand update is expected to be a non-event. The US carryout is expected to increase by just 1.0 million bu. while the World carryout is expected to increase by 470 K T.
The interior soybean basis continues to show a steady to firm bias. A lack of movement is the biggest culprit. I still get the impression the US producer is waiting for the Chinese to show up. Today’s USDA announced sale of 123.5 K T. I doubt is for the Chinese unless it is for late in the marketing year as Brazilian origin continues to severely undercut US offers. Today’s midday Gulf posting continues to show a relatively firm bias (once again it’s all about slow movement). Soybean spreads showed a slightly bearish tone in response to the upfront flat price selling. Offers to sell cash soybean meal run unchanged in the interior as well as for export. Meal spreads ran steady to softer in response to the upfront selling.
The price action for soybeans is sick looking whether it’s for old crop or new crop. If we take out today’s lows in July soybeans the only remaining support is down at the contract low of $8.66. July meal shows a smattering of support from $300.0 to $298.0. Given the rally of the previous two weeks followed by the recent sell-off these two markets look extremely vulnerable to further sell-off. New contract lows in soybean oil says it all. Initial cues will continue to come from the equity and energy markets as long as they remain in “extreme” conditions.
Daily Support & Resistance – 3/10
July Soybeans – $8.75 (?) – $8.95
July Soy Meal – $300.0 – $309.0
July Soy Oil – ??? – $28.50
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.