Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed ¼ cent higher ($8.91 ¾), Sept 2 ¼ cents higher ($8.86 ¾) & Nov 3 cents higher ($8.88 ¼)

August Soybean Meal closed $2.9 higher ($289.8), Sept $2.6 higher ($292.5) & Dec $2.2 higher ($298.0)

August Soybean Oil closed 31 pts higher ($29.98, Sept 17 pts higher ($29.89) & Dec 10 pts higher ($30.16)

Weekly Soybean Export Sales – 257.8 K T. old crop vs. 300-500 K T. expected – 3.344 M T. new crop vs. 1.500-2.000 M T. expected

Weekly Soybean Meal Export Sales – 260.9 K T. old crop vs. 150-400 K T. expected – 32.9 K T. new crop vs. 0-75 K T. expected

Weekly Soybean Oil Export Sales – 0.8 K T. old crop vs. 8-30 K T. expected – 10.0 K T. new crop vs. 0-5 K T. expected

Weekly export sales of new crop soybeans were a “wow” as they exceeded the high guess by 1.3 M T. Despite these eye-opening sales I’d have to call a 3 cent higher close as disappointing. The soybean meal market honoring suggested interim support and then poking its nose up was supportive. Without the meal rally we would have finished lower on the day. Crop conditions continue to be rather good – short term forecasts call for cool and dry while the two week forecast calls for beneficial moisture. August moisture is always critical for pod-filling.

The interior Midwestern soybean basis has a mixed look to it. Soybean processors are showing a steady to easier basis despite improving board crush margins. The interior river looks steady to slack. The Gulf basis continues to be firm. Bull spreads, November forward, showed a tightening bias. Offers to sell cash soybean meal in the interior continue to be no big deal while the export market for meal is showing some firming. Meal spreads had a firm bias starting with the nearby August contract (deliveries start tonight for August soybeans and their respective products). This time of the year is when processors take some down time to get ready for the new crop.

The November soybean price action suggests it is honoring interim minor support. Chinese demand is the support as is the unknown around the August forecasts. As of this writing beneficial moisture  appears to be there but I’m thinking the trade does not want to get ahead of themselves by saying the soybean crop is made. December soybean meal honors suspected interim minor support. Daily technical indicators read middle of the road. For the time being I’m calling December soybean oil a trading range affair between the mid-$29.00’ and the mid-$30.00’s.

Daily Support & Resistance – 7/31

Sept Soybeans: $8.80 – $8.97

Nov Soybeans: $8.82 – $8.98

Dec Soy Meal: $295.0 – $301.5

Dec Soy Oil: $29.80 – $30.75

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.