Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 2 ¾ cents higher ($8.99 ¼), Sept 3 cents higher ($8.94) & Nov 2 ½ cents higher ($8.95 ½)

August Soybean Meal closed $1.0 higher ($286.6), Sept $1.0 higher ($289.4)  & Dec $0.9 higher ($294.2)

August Soybean Oil closed 14 pts lower ($29.93), Sept 14 pts lower ($30.07) & Dec 16 pts lower ($30.52)

USDA announces 453 K T. soybean sold to China (66 K T. old crop, 387 K T. new crop) – announces sales of 262 K T. new crop soybeans rec’d in the reporting period to China – announces 211.3 K T. new crop soybeans sold to unknown

Weekly Soybean Export Sales – old crop vs. 300-700 K T. expected – new crop vs. 1.000-2.000 M T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-300 K T. expected – new crop vs. 0-75 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 5-30 K T. expected – new crop vs. 0-5 K T. expected

It was not a bad performance for the soybean market considering the newest rift between the US and China as it continues to sour relations. Overnight the US told China to move out of their consulate in Houston over the next 72 hours. Supposedly the US rationale behind this request was to protect US intellectual property. As of this writing I have not seen any retaliatory measure from China. Offsetting some of this was the USDA announcing relatively large sales of soybeans to China/Unknown. Weather forecasts appear to be okay for the developing crop but we all know August is the critical pod-filling time. Right now the foliage looks okay. Tomorrow’s trade will be dictated by weekly export sales (expected to be large) and whatever the latest developments may be in the newest US/China rift.

The processor soybean basis is quiet as crush margins remain depressed. The interior river basis (at locations that are still operating as the Illinois River remains shut down)) are mixed; Savanna, IL is a bit better while Davenport, IA appears to be a touch easier. The Gulf continues to be strong whether it’s for old crop or new crop. Soybean spreads continue to show a tightening bias. Not much happens with cash soybean meal whether its for domestic usage or for export. Meal spreads saw limited activity out to January.

The November soybean chart shows some minor downflagging after its recent rise to the low $9.00 level. Minor support shows up at the $8.85 level while resistance still appears clear from $9.05 to $9.10. December meal continues to suggest it’s a trading range affair between $290.0 and $301.0. Anyone trying to be friendly to Dec meal will not want to see closes below the $290.0 level. December soybean oil just threw an outside day at us involving a challenge of recent highs and a lower close. This suggests we may have gone high enough for the time being.

Daily Support & Resistance – 7/23

Aug Soybeans: $8.90 – $9.07 (?)

Nov Soybeans: $8.85 – $9.05

Dec Soy Meal: $291.0 – $298.0

Dec Soy Oil: $29.90 – $31.00

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.