Soybeans Commentary


Soybeans – Just My Opinion

Sept Soybeans closed ¾ cent higher ($9.51 ¼), Nov 3 cents higher ($9.53 ½) & March 3 ½ cents higher ($9.59 ¾)

Sept Soybean Meal closed $3.0 higher ($304.6), Dec $2.8 higher ($312.5) & March $3.6 higher ($314.4)

Sept Soybean Oil closed 43 pts lower ($32.96), Dec 38 pts lower ($32.86) & March 29 pts lower ($33.11)

Weekly Soybean Export Inspections – 804.5 K T. vs. 650 K – 1.000 M t. expected

Weekly Soybean Ratings – 66% GE (-3%) vs. 66% expected vs. 55% year ago – Setting Pods – 95% vs. 93% 5-year average – Dropping Leaves – 8% vs. 8% 5-year average

What’s bullish – the idea of a declining yield due to ongoing dryness in many parts of the Midwest, a frost scare for the northern reaches of the Corn Belt around Sept 10th-11th, continuing Chinese demand and no deliveries against the Sept contract. What’s bearish – short term technically overbought

The end result of all this had November soybeans challenging levels not seen since January before profit taking set in taking the market 14 cents off of its highs finally settling with modest gains on the day. One of the intra-day bearish influences was the noticeable downside reversal registered in the soybean oil market; new highs for the current rally followed by an outside day closing below the previous day’s low. Some of the soybean oil losses can be attributed to the EIA reported lower soybean oil usage for bio-diesel in June. Soybean meal was able to hold its own rally limiting the soybean oil influenced losses.

Despite the talk of cash soybean movement in the Midwest I’m only seeing a couple of locations reporting lower basis values. The Gulf continues to be firm. Soybean spreads led by the November ran fractionally mixed out to Nov ’21. I’m not seeing any changes worth noting in the interior soybean meal basis offers. This holds true for the Gulf as well. Meal spreads had a slight bearish bias out to May ’21.

November soybeans appear to be realizing resistance against the suspected $9.70 level. Weather conditions of the next two weeks will go far in dictating direction. Support for the near term comes in at $9.40. The suggested reversal in December soybean oil is hard to ignore. The USDA will report July Crush tomorrow afternoon and the crush is expected to increase after 3 months of declines. December soybean meal is back to levels ($315.0-$320.0) that have stopped rallies dating back to January.

Daily Support & Resistance – 9/01

Nov Soybeans: $9.40 – $9.65

Dec Soybean Meal: $310.0 – $316.0

Dec Soybean Oil: $32.45 – $33.50 

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.