Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 3 cents lower ($8.64 ¾), August 2 ½ cents lower ($8.67 ½) & Nov 1 ½ cents lower ($8.78)

July Soybean Meal closed $0.7 lower ($288.4), August $0.5 lower ($291.0) & Dec $0.2 lower ($298.0)

July Soybean Oil closed 4 pts lower ($28.10), August 4 pts lower ($28.29) & Dec 2 pts lower ($29.02)

Weekly Soybean Export Inspections – 213.0 K T. vs. 300-600 K T. expected

USDA rates the US soybean crop 72% GE (+2%) vs. 71% expected vs. NA year ago – Planted – 86% vs. 87% expected vs. 79% 5-year average

The recent rally in soybeans took a breather on Monday. The product markets also eased lower on the day. After last week we became accustomed to daily announcements from the USDA announcing soybean sales – there were no sales’ announcements today. Weekly export inspections were best described as dismal. We have to remember that recent sales’ announcements are for 3rd and 4th quarter shipments. I see no problems with current weather forecasts. On Thursday the USDA will update both new crop and old crop supply-demand. As far as old crop is concerned the net change in carryout will be a result of a slight hike in crush and another decline in exports. The only change expected for the new crop will be with whatever changes are seen with the carryin.

The interior Midwestern soybean basis runs steady to lower. The lower basis locations are along the interior rivers.  The Gulf midday basis is steady with Friday’s posting. The underlying trend with the Gulf basis continues to be firm. Soybean spreads ran weaker on the day. How much of that was in response to the flat price selling of the ongoing index fund roll remains to be seen. Offers to sell cash soybean meal in the US interior are unchanged while sowing no real feature. Soybean meal export offers continue to show a firm tone. Soybean meal spreads ran fractionally weaker on the day.

Today’s price action did nothing to squelch the idea that the bias for the soybean complex is higher. Given the recent rallies there is room for correction. That makes sense going into Thursday’s USDA supply-demand update. The complex is trying to make a case from demand, not from short supply. Unfortunately the demand hinges on continued Chinese buying (a continued lower US Dollar will help with that). Without that demand weather/growing conditions will take over and as of this writing they appear to be rather good.

Daily Support & Resistance – 6/09

July Soybeans: $8.57 – $8.75

July Soy Meal: $286.0 – $292.0

July Bean Oil: $27.60 – $28.40

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.