Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 2 ¼ cents lower ($8.69), August 2 ½ cents lower ($8.70) & Nov 3 ¾ cents lower ($8.76)

July Soybean Meal closed $0.6 lower ($288.4), August $0.7 lower ($290.7) & Dec $1.1 lower ($297.3)

July Soybean Oil closed 24 pts higher ($27.74), August 24 pts higher ($27.94) & Dec 18 pts higher ($28.60)

USDA announces 390 K T. new crop soybeans sold to China

Weekly Soybean Export Inspections – 376.3 K T. vs. 300-500 K T. expected

NOPA May Crush – 169.584 million bu. vs. 173.0 million expected – Soybean Oil Stocks – 1.880 billion lbs. vs. 2.068 billion lbs. expected

USDA rates US soybean condition 72% GE vs. 72% expected vs. NA year ago – Planted – 93% vs. 94% expected vs. 88% 5-year average

Soybeans made the day’s lows early and spent the balance of the day trying to get those losses back. Soybean meal tried to make a run higher shortly after the opening but that faded as bean oil started to rally on the coattails of an improving energy market as well as a NOPA crush report that featured lower than expected bean oil stocks. Despite the crush report fewer soybeans crushed vs. expectations meal exports within that report were viewed as disappointing. Crop conditions are expected to be good. Western areas of the Midwest will see some stress developing by midweek while relief is forecasted by week’s end. The USDA announcement of more new crop soybeans sold to China did not get the rousing positive reaction I was expecting. That may be in part to the idea that planted soybean acres are expected to increase on the next USDA acreage report scheduled for June 30th. It’s my opinion that as long as the US Dollar stays depressed China will continue to buy US soybeans especially for new crop.

The interior soybean basis continues to show a firm tone at interior river locations that feed down to the Gulf. Processor bids are steady but there appears to be an unwillingness to pay up since crush margins have been recently battered. Gulf premiums continue to firm especially for the August forward time slots. Nearby spreads were firm vs. the new crop while the new crop spreads showed a bearish bias. Not much happens with the interior cash meal offers; steady to a shade lower. Soybean meal at the Gulf showed better bids with easier offers. Meal spreads mirrored the soybean spreads; fractionally firmer up front while the new crop appeared to be softening.

Continued purchases from China works to keep soybean prices alive at their recent upper end. July soybeans have now closed in a tight 8 cent range for the past 8 days. The closing range for November soybeans is even tighter for the past 8 days, just 4 cents. These tight closing ranges suggest we have a pop one way or the other coming soon. I would like to think the soybean meal will lead the soybeans higher but every time this market tries to poke its head higher it fails to follow through. Right now the meal market is just a sideways trading affair not far from its recent low end. I don’t know what to make of the soybean oil chart. Last week it registered a downside reversal of its near 300 pt rally. It broke nearly 150 pts from the high and got 50% of it back today. Once again I’m not sure what to do with soybean oil.

Daily Support & Resistance – 6/16

July Soybeans: $8.60 – $8.80

July Soy Meal: $286.0 – $292.0

July Bean Oil: $27.30 – $28.20

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.