August Soybeans closed 9 ¾ cents lower ($8.96 ¾), Sept 11 cents lower ($8.87 ¾) & Nov 12 ¼ cents lower ($8.87 ½)
August Soybean Meal closed $3.6 lower ($288.9), Sept $3.5 lower ($291.8) & Dec $4.0 lower ($297.5)
August Soybean Oil closed 18 pts lower ($29.42), Sept 18 pts lower ($29.53) & Dec 22 pts lower ($29.92)
The soybean market rolls over prompted by the 3% pts increase in crop conditions to 72% GE on a national level. This prompts the trade to start thinking about a higher national yield. As of this writing China/US relations are not the best. As much as China claims they will honor the Phase One agreement doubts persist. China needs protein if they are to successfully rebuild their hog herd. The question becomes will they just buy enough from the US until the new crop from Brazil is available. Brazilian new crop comes online as early as January so for the next number of months its going to be make it or break it time for US soybean sales.
Not much happens with the interior Midwestern soybean basis. Chgo bumps their basis, processors standing pat not willing to reach and river locations mixed. The Gulf basis stays firm for soybeans. Bull spreads work for old crop vs. new crop while the new crop spreads continue to leak. 1st Notice Day for August soybeans is Friday and as of this writing it does not look like we’ll see any deliveries. Demand for cash soybean meal does not look like any big deal whether its for domestic use or for export. Meal spreads ran mixed on the day.
November soybeans register an ugly looking interim sell signal as today’s activity wiped out the previous 7 days of price action. Unless we see a resurgence of Chinese buying (and I’m not talking just 2 cargoes a day) a move down to the $8.70 level cannot be discounted. Yesterday Dec meal challenged good resistance levels and turned back south today. If the soybean market is going to be any good in the near term any further downside correction in meal needs to be limited. Dec soybean oil continued with its recent downside correction but is trying to realize support against the $29.50 level. I’m not sure today’s attempt at bouncing from suspected support is going anywhere special as the entire soybean complex is now going to deal with higher yields/greater supply.
Daily Support & Resistance – 7/29
Aug Soybeans: $8.90 – $9.05
Nov Soybeans: $8.80 – $8.95
Dec Soy Meal: $295.0 – $300.5
Dec Soy Oil: $29.60 – $30.25
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