July Soybeans closed 13 ¾ cents higher ($8.47), August 12 ¼ cents higher ($8.48 ¾) & Nov 10 ½ cents lower ($8.55)
July Soybean Meal closed $0.2 lower ($283.9), August unchanged ($286.0) & Dec $0.3 higher ($292.8)
July Soybean Oil closed 63 pts higher ($27.27), August 63 pts higher ($27.45) & Dec 65 pts lower ($28.15)
USDA announces 258 K T. of soybeans sold to China (60 K T. old crop, 198 K T. new crop)
USDA announces 216 K T. of soybean meal sold to unknown (old crop)
Weekly Soybean Export Inspections – 333.1 K T. vs. 350-600 K T. expected
USDA reports 65% of the intended soybean crop has been planted vs. 69% expected vs. 55% 5-year average
Despite the media touting increasing tensions between the US and China over the weekend China buys one cargo of old crop soybeans and three cargoes of new crop soybeans. The combination of the sharply lower US Dollar vs. the sharply higher Brazilian Real also lent support. I do think a fair amount of today’s buying was technically inspired since the suggested trading range low was tested on Friday and managed to hold. Soybean oil carried the ball as far as product strength. Higher energy prices from the idea that bio-diesel usage will improve as economies open back up. Today’s announced soybean meal sale, one of the largest daily meal sale announcements that I can remember had limited impact. It lasted for about an hour before oil/meal spreading took over weighing on Meal prices for the balance of the day.
Interior Midwest cash soybean prices do little on Monday. There was some flip-flopping on the mid-Miss but that was about it. The Gulf basis at midday was unquoted for the balance of May, a bit easier for June. Soybean spreads ran noticeably firmer on the day but I have to ask how much of today’s buying was just spec related as weekly export inspections were nothing to write home about as was the one old crop cargo sale to China. Offers to sell cash soybean were noticeably firm on Friday and just the opposite today. Meal spreads continue to show a widening bias.
Soybean charts continue to suggest a range bound trade. We tested suggested interim support on Friday and it held. That price action in itself prompted some of today’s short covering. It is still my thought that July soybeans stay relegated to a $8.30 to $8.60 trading range. AS I’ve said before it will be difficult for the soybean market to sustain any appreciable upside momentum if the meal market cannot distance itself from its recent contract lows. The rally in soybean oil is good for one thing – it will work to keep the soybean market alive but that’s about it. Soybean oil all by itself should continue to exhibit problems eclipsing the $28.00 level.
Daily Support & Resistance – 5/27
July Soybeans: $8.38 – $8.55
July Soy Meal: $281.50 (?) – $287.0
July Bean Oil: $26.70 – $27.75
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.