May Soybeans closed ¾ cent lower ($8.54 ¾), July ¼ cent lower ($8.61) & Nov 1 ½ cents higher ($8.66 ¾)
May Soybean Meal closed $3.2 lower ($293.8), July $2.1 lower ($297.8) & Dec $2.2 lower ($300.4)
May Soybean Oil closed 65 pts higher ($27.48), July 66 pts higher ($27.81) & Dec 65 pts higher ($28.61)
Soybeans just can’t get anything going as the sagging soybean meal market totally offsets the strength in soybean oil. Notable soybean buying from the Chinese has yet to appear here in the US but it has to be noted they are continuing buyer of Brazilian soybeans. Additionally, it was announced today that Sino Grain has released 500 K T. of Chinese state reserve soybeans to Cofco. So here you have it – China buys Brazil and receiving state reserves – no wonder US soybeans struggle to sustain a rally. Soybean oil gets its strength from short covering prompted by higher palm prices. Palm plantations continue to shut down. Soybean meal continues to take it on the chin from liquidation. Buyers were run in two weeks ago thinking we would have this tremendous export program due to logistical/political problems in Argentina. That market making business has yet to materialize so buyers from two weeks ago are liquidating.
The soybean processor basis runs mostly unchanged while river locations are posting lower basis levels. The Gulf midday posting is slightly easier from last night’s posting. Soybean spreads were easing all the way out to the new crop. Interior offers to cash soybean meal run steady to easier. Gulf offers for soybean meal absolutely fell out of bed today. Needless to say May meal continues to lose big time on the spread. I couldn’t help but notice July meal led spreads had a bullish bias out to October.
As I mentioned earlier the old crop soybean charts are going nowhere fast. As long as the meal charts are sinking that should continue. Strength in soybean oil is just not enough. For what it is worth July soybean oil has reached its near term objective of $28.00. As far as soybean oil getting its strength from palm oil I don’t see that rally lasting much longer. Sure plantations are shutting down due to virus issues but demand is being sharply curtailed for the same reasons. These should be eventually offsetting issues. Its hard to imagine soybean meal going much lower but so far there is nothing in the price action suggesting lows have been attained.
Daily Support & Resistance – 4/08
July Soybeans – $8.55 (?) – $8.74
July Soy Meal – $296.0 (?) – $304.0
July Soy Oil – $27.20 – $28.40
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.