Soybeans Commentary


Soybeans – Just My Opinion

May Soybeans closed 4 ½ cents higher ($8.39 ¼), July 4 ¼ cents higher ($8.46 ¾) & Nov 1 ½ cents higher ($8.48)

May Soybean Meal closed $0.4 higher ($288.7), July $0.2 lower ($293.1) & Dec $0.8 lower ($295.8)

May Soybean Oil closed 4 pts higher ($25.61), July 2 pts higher ($26.01) & Dec 8 pts lower ($26.73)

Weekly Soybean Export Sales – 344.9 K T. old crop vs. 300-750 K T. expected – 0.5 K T. new crop vs. 50-300 K T. expected

Weekly Soybean Meal Export Sales – 102.9 K T. old crop vs. 100-300 K T. expected – 15.5 K T. new crop vs. 0-25 K T. expected

Weekly Soybean Oil Export Sales – 21.4 K T. old crop vs. 8-35 K T. expected – no new crop vs. 0-5 K T. expected

USDA announces 272.0 K T. old crop soybeans sold to China – brings the 2-day announced total to 470 K T.

The other day the trade talk was that China had bought 500 K T. of US soybeans out of the Gulf. Yesterday the USDA announced 198 K T. of soybeans sold to china and this morning the USDA announced another 272 K T. of soybeans sold to China bringing the 2-day total to 470 K T. Adding to this was the talk that going forward China would buy 10.0 M T. of soybeans in an effort to restock their state reserves. This comes from the same “sources” that were touting the 20.0 M T. corn purchase. In addition to these purchases the “sources” touted 1.0 M T. of cotton, 1.0 M T. of sugar and 2.0 M T. of soybean oil. Exactly when all this comes to fruition remans to be seen. The recent Chinese purchases are tied to the idea they are showing good faith in honoring the January trade deal. Be aware they paid up for these soybeans since Brazil remains a cheaper origin for much of the balance of the current crop year. For what it is worth weekly export sales for both soybeans and soybean meal were deemed no big deal. It is my thought that the recent run of soybean buying is speculative short covering.

The interior soybean basis continues to show a steady to higher bias mostly from slow movement. Not much is happening at the Gulf. Recent spread strength is also tied to spec short covering. Offers to sell cash soybean meal have not done much in recent days despite ideas that the rate of crush will be slowing in the days ahead. Meal spreads showed a very slight bullish bias on the day.

Today’s early strength had soybean prices banging into the low end of recently established resistance. As of this writing its hard to imagine July soybeans much better than $8.60. Today’s high was $8.56 ¾ before they sold off. Soybean meal continues to test the suggested reversal that was registered a couple of days ago. If the meal market can honor that reversal soybeans will find support on efforts to sell off. The early in the day rally in soybean oil found resistance against levels that were established late last week. Long story short – more Chinese buying will be needed to keep the recent soybean rally alive. Watch your meal market for signs of holding just below the $290.0 level. Failure to hold will have the soybean market rolling over.

Daily Support & Resistance – 4/24

July Soybeans – $8.35 – $8.54

July Soy Meal – $289.0 – $296.5

July Soy Oil – $25.60 – $26.40

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.