May Soybeans closed 11 cents higher ($8.41 ½), July 11 ¾ cents higher ($8.44 ¼) & Nov 9 cents higher ($8.48 ¼)
May Soybean Meal closed $0.5 higher ($283.6), July unchanged ($288.1) & Dec $0.1 higher ($294.1)
May Soybean Oil closed 42 pts higher ($25.94), July 42 pts higher ($26.26) & Dec 36 pts higher ($27.08)
Weekly Soybean Export Sales – 653.1 K T. old crop vs. 600 k – 1.100 M T. expected – 177.5 K T. new crop vs. 100-300 K T. expected
Weekly Soybean Meal Export Sales – 131.4 K T. old crop vs. 100-250 K T. expected – 39.8 K T. new crop vs. 0-75 K T. expected
Weekly Soybean Oil Export Sales – 18.9 K T. old crop vs. 5-30 K T. expected – 2.8 K T. new crop vs. 0-5 K T. expected
Modest short covering lifts soybeans on Thursday. Weekly export sales were nothing to write home about; if anything they were disappointing. We do have a bit of a weather play in the short term in the form of frost/freeze warnings for a good portion of the Midwest as we move into the coming weekend. It is my opinion that most of the spark behind the short covering is the idea we may see further buying from the Chinese. Next week trade representatives from both sides meet to discuss the Phase One agreement. Granted China has a long way to go in meeting the commitments laid down in this agreement it is my thought neither side can afford to see this agreement fall be the wayside.
Interior cash soybean markets run unchanged on the day but with a firm undertone. Producer selling continues to be minimal. The gulf market appears to be mostly steady. I’m going to say bull spreads were working in response to the flat price short covering. If China is to buy more US soybeans I have to think they will favor the new crop. Offers to sell cash soybean meal run unchanged with no real spark to this market. Meal spreads were pretty much a non-event today.
For the time being July soybeans appear relegated to a trading range between $8.30 and $8.60. Next carryout projection for old crop is expected to come in slightly higher. Ideas for the new crop carryout are lower vs. the current marketing year but ideas range far and wide as to how much lower. The long and short for July meal is that it just can’t get off of its can and as long as this lasts it will act as a drag on the soybean market’s rally potential. The short term picture for July bean oil is that it looks like it wants to go higher but there’s just not enough fundamental rationale to substantiate a sustaining rally. For the time being I’ll call July bean oil a trading range affair between $25.50 and $27.50.
Daily Support & Resistance – 5/08
July Soybeans – $8.35 – $8.50
July Soy Meal – $286.0 – $292.0
July Bean Oil – $25.80 – $26.80
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