May Soybeans closed 3 cents lower ($8.52 ¼), July 3 cents lower ($8.52) & Nov 1 ½ cents lower ($8.57)
May Soybean Meal closed $2.3 higher ($288.6), July $1.8 higher ($292.1) & Dec $1.2 higher ($297.4)
May Soybean Oil closed 21 pts lower ($25.98), July 23 pts lower ($26.26) & Dec 24 pts lower ($27.07)
CONAB suggests Brazilian soybean production is 120.3 M T. vs. 122.0 M T. in April
USDA announces 136 K T. old crop soybeans sold to China
Highlights of the USDA US Supply-Demand Report – Old Crop – lowered exports 100 million bu., increased carryout 100 million bu. – New Crop (year to year) – increased production 568 million bu., increased crush 5 million bu., increased exports 375 million bu., lowered carryout 175 million bu.
Highlights of the USDA World Supply-Demand Report – Old Crop – lowered the carryout by 18 K T. – New Crop – lowered carry-in by 10.0 M T., increased production 24.7 M T., increased usage by 12.0 M T., lowered carryout by 1.88 M T.
A 580 million bu. old crop carryout suggests we have more than enough soybeans on hand for the next 4 months to handle any new influx of Chinese demand and that led to the easier close. The mixed to easier price action in the new crop suggests the smart guys are leaning to an increase in soybean planted acres. Couple that idea with the idea that the rapid pace of planting that so far will suggest solid yields. The bottom line to the soybean market is easy – its called China. Will they follow through on their commitments that were established within the Phase One/Phase Two trade agreements? Will something come along that will sour the deal?
The interior cash soybean market (basis) still shows a steady to firm undertone. The Gulf midday soybean market is steady with recent postings. I will admit the recent rally in the flat price has trimmed the export basis from what it was two weeks ago. Soybean spreads showed a bearish inclination with today’s price action. The interior cash soybean meal market shows steady truck offers, a slightly improved rail market and a steady export market. Meals spreads showed a slight bullish bias on the day.
Yesterday posted a 4 week high in July soybeans followed by an inside day today. The inside day does not negate the recent 3-day rally but it does create a bit of concern. As long as the meal market continues to advertise support I’ll suggest July soybeans should try and see what’s in the mid-low $8.60’s. If July meal can give us a convincing close above $295-$296 it should attract a fair amount of short covering and that will boost soybeans higher. I’m not sure what to say about soybean oil other than it’s a trading range affair between $25.50 to $27.00.
Daily Support & Resistance – 5/13
July Soybeans – $8.40 – $8.65
July Soy Meal – $289.0 – $297.0
July Bean Oil – $25.90 – $26.80
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