Nov Soybeans closed 21 cents lower ($10.22 ½), March 17 cents lower ($10.21) & July 11 ½ cents lower ($10.18 ¾)
October Soybean Meal closed $4.0 lower ($333.4), Dec $4.0 lower (338.1) & March $3.9 lower ($335.2)
October Soybean Oil closed 96 pts lower ($34.27), Dec 94 pts lower ($34.20) & March 79 pts lower ($34.28)
USDA announces Soybean Export Sales – 132 K T. sold to China, 132 K T. sold to Pakistan, 171 K T. sold to Unknown
Weekly Soybean Export Inspections – 1.310 M T. vs. 1.000-1.580 M T. expected
Weekly US Soybean Crop Rating & Progress – 63% GE (unch) vs. 62% expected vs. 54% year ago – Harvested – 6% vs. 5% expected vs. 6% 5-year average – Dropping Leaves – 59% vs. 50% 5-year average
Continued export buying as evidenced by today’s announced sales failed to spark any new enthusiasm. Weekly export inspections were solid vs. expectations but they too were unable to stem the run of profit taking. Talk of a technical overbought, near record speculative interest, beneficial moisture moving into Brazil for new crop planting and a surge in the value of the US Dollar all worked together to spark today’s sharp correction throughout the soy complex. The developing harvest is attracting bushels to be sold off of the combine due to the lack of carry within the futures’ market price structure. Like corn the trade is expecting to see a slight decline in crop conditions. One has to remember this is a windshield survey. With that said how good can a soybean plant look without its leaves?
The interior soybean basis is running steady to lower. The locations that are lower are seeing active harvest. Late last week the Gulf basis took a bit of hit in response to the sharply higher futures. The midday posting suggests some stabilization. Soybean spreads ran easier/wider on the day in response to the upfront flat price selling. The interior cash meal basis runs steady to a touch better due to a number of locations still looking at seasonal downtime. The gulf basis for meal stays firm as well. Meal spreads were only fractionally softer on the day.
Today’s sharp break in November soybeans took care of the recent overbought scenario. From a technical point of view there is still room for further downside correction; maybe something closer to the $10.10 – $10.05 level. Harvest is just getting going not even 10% done. What is getting harvested appears to be getting sold due to the lack of carry in the price structure. Going forward I have to wonder how much of the concentrated Chinese buying has to do with the weak Us Dollar. With that said I think the strength/weakness of the US dollar and anecdotal yields will dictate how much more correction we see of if today was just a one day wonder. Soybean meal was the strength in the product markets today. The resulting price action was just an inside day. Inside days are not known to rattle the underlying price trend. If the meal market stays firm and price break in soybeans will be short lived.
Daily Support & Resistance – 9/22
Nov Beans: $10.15 ($10.05) – $10.38
Dec Bean Meal: $333.0 – $343.0
Dec Bean Oil: $33.85 – $34.75
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.