Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 9 ½ cents higher ($8.93 ¾), August 12 ¾ cents higher ($8.91 ½) & Nov 16 ¾ cents higher ($8.99)

July Soybean Meal closed $6.4 higher ($292.7), August $6.4 higher ($295.5) & Dec $8.7 higher ($304.6)

July Soybean Oil closed 23 pts higher ($28.21), August 22 pts higher ($28.36) & Dec 20 pts higher ($29.01)

Weekly Soybean Export Sales – old crop vs. 300-800 K T. expected – new crop vs. 300-800 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 75-250 K T. expected – new crop vs. 0-50 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 5-25 K T. expected – new crop vs. 0-5 K T. expected

Not as many acres as originally planned and now we have a budding weather issue. In the past three days funds have bought in the vicinity of 30 K contracts of soybeans. Can you imagine where we would be if China became an active buyer and not just a sporadic buyer? The meal market has finally woken up. A good portion of today’s soybean buying can be tied to the rallying soybean meal market. As I’ve mentioned in the past soybeans won’t be able to sustain a rally without the meal market but now we have the meal market participating. With that said higher prices seem inevitable for the soybean market especially if the weather threat sticks around.

Cash markets are showing some defensive posturing as the rally has brought out some old crop soybeans. Upfront soybean spreads have widened with the rally. It seems most of the buying is being focused in the Nov, Jan and March contracts. The makes sense as that time frame should be the height of our export market.

November soybeans flirt with the suspected resistance levels of $9.00 — $9.05. The price action did not suggest a rejection of this price level. If the overnight forecasts don’t show any change in the call for hot and dry I have to think we’ll plow right through that level ahead of our 3-day weekend. Next stop will be $9.20 or so. Dec meal has wiped out the past three months of bearish price action. Right now I’m thinking $310.0 – $315.0 might be a tougher to move through. Like any good bull market in soybeans soybean oil plays second fiddle to the meal and the beans. It will go along for the ride but to a lesser extent.

Daily Support & Resistance – 7/02

Aug Soybeans: $8.83 – $9.08

Nov Soybeans: $8.90 – $9.15

Dec Soy Meal: $301.0 – $311.0

Dec Soy Oil: $28.65 – $29.50

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.