Nov Soybeans closed ¾ cent higher ($10.21 ½), March ½ cent lower ($10.18 ¼) & July 1 cent higher ($10.21 ¾)
October Soybean Meal closed $5.8 lower ($343.6), Dec $5.9 lower ($346.0) & March $4.3 lower ($342.6)
October Soybean Oil closed 87 pts higher ($32.81), Dec 90 pts higher ($32.56) & March 82 pts higher ($32.72)
Weekly Soybean Export Inspections – 1.667 M T. vs. 1.050-1.550 M T. expected
Weekly US Soybean Crop Condition & Progress – 64% GE vs. 64% expected vs. 53% year ago – Dropping Leaves – 85% vs. 82% 5-year average – Harvested – 38% vs. 36% expected vs. 28% 5-year average
Soybeans move into a minor backing and filling phase following last week’s sharp rally off of the stocks report. The trade is still expecting to see a bullishly construed report from the USDA on Friday; lower carryin, lower production and higher demand. The biggest feature of the day was the reversal pattern in the soybean meal/soybean oil spreads. Meal takes a hit from ideas of overbought as well as recently harvested soybeans moving to the processor. Soybean oil rallies hard taking its cue from a rebounding palm oil market as well as the sharply higher crude oil market. Weekly export inspections come in at the high side of expectations. There is some concern that the spec trade might be getting a bit too long as the latest COT report showed new spec longs were added during a period when the market was in a downside correction phase. Additionally soybean open interest has topped the one million mark for the first time ever. The other side of this is that strong buying during a correction period and rising open interest are all of the basic signs of a bull market.
The interior Midwestern soybean basis reads mixed to better. The Ohio River is 3 cents better, Decatur, IL is 5 cents better, Toledo 2 cents better and Savanna, IL 2 cents easier. The Gulf soybean basis eases from the highs we saw mid last week. The soybean meal basis runs unchanged with its best strength at the Gulf. The strong Gulf meal basis was overshadowed by today’s flat price selling/liquidation.
The Nov soybean chart appears to be downflagging from last Wednesday’s rally. Support should come into play down towards the $10.10-$10.05 level. The Sept 18th high, $10.46 ¾, is the immediate resistance. Dec meal registers an inside day of Friday which posted the contract high at $354.1. Inside days are not usually seen as precursors to tops; just a consolidation phase. Dec soybean oil reverses Friday’s suggested interim sell signal. If I didn’t know better the two product markets are just doing some realignment given the meal market’s recent sharp advance vs. bean oil. Soybeans appear to be biding their time ahead of Friday’s USDA production/Supply-Demand update.
Daily Support & Resistance – 10/06
Nov Beans: $10.10 – $10.40
Dec Bean Meal: $340.0 – $352.0
Dec Bean Oil: $32.00 – $33.20
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 eclipse the high side of expectations. results.