Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 1 ¾ cents higher ($9.06 ½), Sept unchanged ($8.98 ¾) & Nov ½ cent higher ($8.99 ¾)

August Soybean Meal closed $1.7 higher ($292.5), Sept $1.8 higher ($295.3) & Dec $2.9 higher ($301.5)

August Soybean Oil closed 20 pts lower ($29.60), Sept 21 pts lower ($29.71) & Dec 23 pts lower ($30.14)

Weekly Soybean Export Inspections – 472.6 K T. vs. 350-700 K T. expected

USDA announces 132 K T. new crop soybeans sold to China & 250.4 K T. new crop soybeans sold to Mexico

USDA says US Soybean Crop now rated 72% GE (+3%) vs. 69.5% expected vs. 54% year ago – Blooming – 76% vs. 72% 5-year average – Setting Pods – 43% vs. 36% 5-year average

Soybeans stay alive as they continue to flirt with the suspected resistance levels of $9.05 to $9.10. The meal market poked its nose up as meal/oil spreading lent support as bean oil eases taking its cue from the palm oil market. Crop conditions, for the most part, appear to be okay for the developing soybean crop. If the recent amounts of rain around the Midwest continue into August they will go far in suggesting a good soybean crop. Then it will come down to demand. One has to think the Brazilian is just about out of soybeans so it should be a US dominated market at least until January when the Brazilian new crop comes online.

The interior processor soybean basis continues to show a defensive look for old crop. Board crush margins are slack looking for the old crop but are trying to show improvement for the new crop. The interior river basis continues to show a defensive posture. The Gulf, however, continues to ratchet higher. Old crop soybeans continue to gain on the new crop while new crop spreads are softening. Not much happens with the cash meal basis. Demand in the domestic market is called “routine”. The export market edges ever-so-slightly higher. Despite today’s higher flat price bear spreads were working upfront while Dec forward showed a bullish bias.

How long can November soybeans continue to honor suspected resistance levels before rolling over? It will be interesting to see if tonight’s crop condition report can outweigh the additional demand. December soybean meal breaks out of recent mini trading range but it does have overhead technical resistance to deal with – $305.0 to $308.0. December soybean oil registered an interim double top last week against the $31.00 level. Since then the flat price has been flagging lower. The best looking near term support comes in closer to $29.60 – $29.40. If the meal market stumbles after today’s rally bean oil should receive some left handed support.

Daily Support & Resistance – 7/28

Aug Soybeans: $8.95 – $9.10 (?)

Nov Soybeans: $8.87 – $9.05

Dec Soy Meal: $296.0 – $305.0

Dec Soy Oil: $29.60 – $30.60

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.