Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 8 ¼ cents higher ($8.86 ¼), Sept 6 ½ cents higher ($8.80 ¾) & Nov 5 ¼ cents higher ($8.82 ¾)

August Soybean Meal closed $0.6 higher ($285.8), Sept $1.0 higher ($288.6)  & Dec $1.1 higher ($293.4)

August Soybean Oil closed 34 pts higher ($28.80), Sept 33 pts higher ($28.94) & Dec 28 pts higher ($29.37)

USDA announces 389 K T. new crop soybeans sold to China

NOPA June 2020 Crush – 167.263 million bu. vs. 162.168 million expected – Soyoil Stocks – 1.778 billion lbs. vs. 1.813 billion lbs. expected

Weekly Soybean Export Sales – old crop vs. 300-950 K T. expected – new crop vs. 400-900 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 75-300 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

The recent China buying spree continues as it appears their focus has moved back to soybeans. Between overnight and today the talk is that up to 15 cargoes of US soybeans have been purchased. Recent weather should prove to be beneficial to the developing soybean plant but the most critical time frame is August when pod-filling occurs. Weekly export sales are expected to be solid but nothing eye-opening. The other side of that is that recent export sales have exceeded daily announced sales suggesting a good portion of the recent Chinese buying has been done flying under the radar meaning below the USDA daily reporting limits.

Board crush margins continue to be on the defensive and that has soybean processors on the defensive with their advertised basis levels. The Gulf basis shows a firm tone feeling the effects of the Illinois River being shut down for all practical purposes. Bull spreads were working noticeably as August gained 3 cents on the Nov and Sept is now within 2 cents of the Nov. Not much happens with the cash meal basis either for domestic usage or for export. August meal loses to Sept forward while Sept forward spreads run steady to a shade tighter.

On Monday November beans tested the high side of suspected support and the now price action suggests they are trying to upflag out of that break. I’ve never been impressed with upflagging efforts. Watch the $8.88 – $8.90 level to offer some resistance. Dec meal flirts with the high side of support, $290.0 to $288.0, and so far holds. $300.0 represents first level resistance. December soybean oil continues with its sideways to higher grind led by the palm oil market. $30.00 remains the initial target.

Daily Support & Resistance – 7/16

Aug Soybeans: $8.77 – $8.92

Nov Soybeans: $8.75 – $8.90

Dec Soy Meal: $290.0 – $297.0

Dec Soy Oil: $28.80 – $29.85

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.