Soybeans Commentary


Soybeans – Just My Opinion

May Soybeans closed 18 ½ cents higher ($8.50 ¼), July 17 ¾ cents higher ($8.55 ¼) & Nov 13 ½ cents higher ($8.57 ¾)

May Soybean Meal closed $6.4 higher ($289.6), July $6.5 higher ($295.1) & Dec $3.3 higher ($297.9)

May Soybean Oil closed 45 pts higher ($26.23), July 43 pts higher ($26.60) & Dec 39 pts higher ($27.40)

Weekly Soybean Export Sales – 1.078 M T. old crop vs. 700 K – 1.200 M T. expected – 105.0 K T. new crop vs. 100-400 K T. expected

Weekly Soybean Meal Export Sales – 163.6 K T. old crop vs. 100-250 K T. expected – 60.1 K T. new crop vs. 0-25 K T. expected

Weekly Soybean Oil Export Sales – 29.8 K T. old crop vs. 8-30 K T. expected – no new crop vs. 0-5 K T. expected

Month end short covering/position squaring. No May soybean deliveries. No May soybean meal deliveries. We also saw some strong looking weekly export soybean sales while already knowing about 700 K T. sold that were announced through the daily USDA reporting system last week. These items set the tone for a higher bias to begin the day. As the day session developed more buying showed up as talk of new Chinese buying (last night and during the today’s morning hours) circulated. According to “traders” China bought at least 300 K T. of soybeans out of the US gulf. We’ll be looking for an announcement from the USDA tomorrow morning unless this unsubstantiated business was bought in small tranches (under 100 K T.)

Only a couple of changes are being noted with the interior soybean basis and they mixed; the Ohio River a bit better and Savanna, Il a bit easier. Overall the interior soybean basis is no worse that steady. The gulf soybean basis’ midday posting continues to hold on to Thursday’s firmness. The lack of deliveries, rumored Chinese business, month end position squaring all worked together to prop up both soybean and soybean meal spreads.

Both the soybean and soybean meal markets’ recent price action is trying to suggest we’ve gone low enough for now. The July soybean chart gave us 5 days of downflagging following last week’s rally and now today’s price action is spring boarding up and out of that test of last week’s low. I will admit I dissed soybean meal’s suggested reversal yesterday but today’s rally is hard to ignore. I’m not an advocate of chasing rallies but I would be open to looking at a retracement back down to the $290.0 level (July). July bean oil rallies back to recently established minor resistance levels. It’s hard to ignore the double bottom on the charts and it’s even more pronounced on close only charts. If you believe that soybeans and soybean meal have the potential to rally further soybean oil will go along for the ride.

Daily Support & Resistance – 5/01

July Soybeans – $8.45 – $8.60

July Soy Meal – $291.0 – $297.0

July Soy Oil – $26.00 – $27.00

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.