July Soybeans closed 4 ¼ cents lower ($8.70 ¾), August 4 ½ cents lower ($8.67 ½) & Nov 4 cents lower ($8.70)
July Soybean Meal closed $0.4 higher ($286.7), August $0.5 higher ($288.8) & Dec $0.7 higher ($293.2)
July Soybean Oil closed 52 pts lower ($27.65), August 52 pts lower ($27.85) & Dec 54 pts lower ($28.50)
Weekly Soybean Export Sales – old crop vs. 400-900 K T. expected – new crop vs. 400 K – 1.000 M T. expected
Weekly Soybean Meal Export Sales – old crop vs. 100-250 K T. expected – new crop vs. 0-50 K T. expected
Weekly Soybean Oil Export Sales – old crop vs. 5-30 K T. expected – new crop vs. 0-5 K T. expected
Soybean oil sells off sharply from the sharply lower energy sector as well as from fears questioning the re-opening of the economy. As I mentioned the other day soybean oil’s price action is dictated from both the food and energy sectors. Soybean meal is almost stagnant. The break in bean oil did not offer much inter-market spread support. With that said the soybean market’s lower price performance took its cue form the lower bean oil and stagnant meal market. Trade rumors continue to suggest Chinese interest but nothing was announced today. The trade will closely scrutinize tomorrow’s export sales for evidence of additional Chinese buying. The Bloomberg new wire survey is suggesting soybean planted acres could increase by 1.32 million acres vs. the March report and up 8.73 million acres vs. last year. Couple the potential acreage increase with the good growing conditions it would suggest that if we are going to have any kind of bull market we are going to have to have some powerful demand.
The interior Midwestern soybean basis continues to show a firm tone with the exception of some Illinois River locations that will be impacted by the lock and dam closures scheduled to begin in July. The nearby Gulf basis eases a bit while the forward time slots continue to be firm. The strength in the forward time slots suggest the demand for new crop from China. Soybean spreads mixed to fractionally easier on the day. The nearby July/August soybean spread at one point to traded into a 5 cent inverse but eased along with the flat price.
The price action for old crop soybeans suggests they are trying to stand in as the trade will not give up on the idea of further Chinese buying. Unfortunately it’s my idea that if we are to see further Chinese interest it will be for the new crop and right now that is being offset from the idea of a larger crop. New crop soybean charts are not showing the resolve that is being witnessed in the old crop. Soybean meal continues to be a dog. Without meal participating in higher prices I will continue to question the soybean market’s ability to sustain a rally. Soybean oil charts are advertising correction. If you think the bean oil market has topped out I’m not sure you need to sell the current break to participate.
Daily Support & Resistance – 6/25
July Soybeans: $8.65 ($8.60) – $8.80
July Soy Meal: $284.5 – $288.5
July Soy Oil: $27.30 – $28.10
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.