Nov Soybeans closed 30 ½ cents higher ($10.23 ½), March 27 ¼ cents higher ($10.21) & July 24 ¼ cents higher ($10.22 ¾)
October Soybean Meal closed $12.4 higher ($339.7), Dec $10.9 higher ($342.8) & March $9.4 higher ($338.5)
October Soybean Oil closed 50 pts higher ($33.37), Dec 44 pts higher ($33.13) & March 45 pts higher ($33.27)
Weekly Soybean Export Sales – old crop vs. 1.500 – 2.500 M T. expected – new crop vs. none expected
Weekly Soybean Meal Export Sales – old crop vs. -50+50 K T. expected – new crop vs. 150-400 K T. expected
Weekly Soybean Oil Export Sales – old crop vs. 0-5 K T. expected – new crop vs. 0-30 K T. expected
USDA announces Soybean Export Sales – 215.0 K T. sold to Unknown
Quarterly Soybean Stocks – 523 million bu. vs. 576 million expected
2019/20 Soybean Crop Revised – 3.551 billion bu. vs. 3.575 billion expected vs. 3.552 billion recent USDA
Today’s rally started almost right out of the box. The morning’s opening was shade easier and I think it lasted all of 2 minutes before seeing a 10 cent rally over the next 45 minutes. The product markets saw similar moves led by the meal market. I was willing to write this rally off as month-end, quarter-end shenanigans. Then came the USDA with near out of the ballpark lower than expected quarterly stocks figure. So where did the reduction come from – some will say a revision to the negative 45 million bu. residual. The bottomline is that the carryin for the current marketing year will be reduced by 52 million bu. Couple this with the idea that as we move through harvest yield will come down it could lead to tightness we haven’t seen in a number of years. Now – let’s add the possibility of a difficult growing year in Brazil. I know it’s still relatively early but they are off to a dry start but if the possible weather scenario develops it could easily lead to additional Chinese demand. With all of this said I have to think the soybean market will be biased to move higher until the Brazilian crop is up and growing.
The interior cash soybean market continues to look for soybeans whether its from the processor or those locations involved with export. The Gulf basis continues to be strong for soybeans. The Nov/Jan soybean spread only improved fractionally while the Jan forward spreads tightened noticeably. It will be interesting to see what kind of cash movement we see tonight after today’s rally. The interior soybean meal basis has a tightening bias as does its export market. Meal spreads tightened along with the soybean spreads.
Price charts for both soybeans and soybean meal after today’s action are suggesting the recent week, week and half, of correction has run its course. After today’s stout rally we could see some backing and filling overnight but I have to think corrections of today’s rally will be well received. Based on today’s 47 cent range support should come into play around $10.15 to $10.10 (Nov). Dec soybean meal may see some backing and filling stemming from today’s stout rally that featured new contract highs. As of this writing I’m thinking $337.0 to $335.0 will be viewed as support. The recent weak sister of the complex, soybean oil, after today’s action is suggestion it’s recent break has also run its course. Dec bean oil should be able to find support against the $32.50 level and now first resistance for a retracement rally is something close to the $34.25 level.
Daily Support & Resistance – 10/01
Nov Beans: $10.15 – $10.40
Dec Bean Meal: $337.0 – $350.0
Dec Bean Oil: $32.80 – $33.60
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