July Soybeans closed 17 ¾ cents higher ($8.84 ¼), August 17 ¼ cents higher ($8.78 ¾) & Nov 20 ¾ cents higher ($8.82 ¼)
July Soybean Meal closed $5.8 higher ($286.3), August $5.5 higher ($289.1) & Dec $7.3 higher ($295.9)
July Soybean Oil closed 36 pts higher ($27.98), August 36 pts higher ($28.14) & Dec 35 pts higher ($28.81)
Not to be outdone by the corn market’s surprises the soybean acreage figure was a surprise as well. The trade was expecting to see an acreage increase of 1.26 million acres. The USDA gave us an increase of just 315 K acres planted, 200 K harvested. The USDA went on to say that another 12.2 million acres were left to be planted when their report was compiled. The Quarterly Stocks report was pretty much on the money vs. trader expectations – 1.385 billion bu. vs. 1.392 billion expected. Not only was the smaller than expected acres the catalyst for today’s rally but also the unknown around the 12.2 million acres left to be planted. The near term calls for “hot & dry” don’t help. So going forward the wild cards will be naturally the weather especially come August and the current political football called China. Is it my imagination that the US administration is trying to dissuade the Chinese from living up to their Phase One agreement?
After today’s action I have think the next upside target for November soybeans will be the gap up towards the $9.05 level. After that it’s something closer to the $9.30 level. To see the latter price level the soybean meal market will have to follow through on today’s rally. If we can see Dec meal give us a conclusive close above $302.0 then I’ll expect to see something closer to the $315.0 level. If today’s price action in Dec soybean oil is trying to suggest its recent correction is over something closer to $31.50 can be expected. Be careful as soybean oil is much closer tied to economies reopening for fuel usage as well as food usage. If you’re bullish soybeans then you want the meal market to lead the way higher vs. soybean oil being the leader in the product markets.
Daily Support & Resistance – 7/01
Aug Soybeans: $8.72 – $8.95
Nov Soybeans: $8.76 – $9.00
Dec Soy Meal: $293.5 – $302.0
Dec Soy Oil: $28.45 – $29.45
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