Nov Soybeans closed 7 cents higher ($10.51), March 2 ¾ cents lower ($10.35 ¼) & July 5 ½ cents lower ($10.25 ¼)
October Soybean Meal closed $6.7 higher ($361.0), Dec $6.3 higher ($361.8) & March $1.3 higher ($349.7)
October Soybean Oil closed 2 pts higher ($33.31), Dec 6 pts lower ($33.03) & March 18 pts lower ($32.99)
USDA Announces Soybean Export Sales – 132.0 K T. sold to China; 120.0 K T. sold to Unknown
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. 150-500 K T. expected
Weekly Soybean Oil Export Sales – old crop vs. 0-5 K T. expected – new crop vs. 0-30 K T. expected
It’s all about upfront demand and whether or not the US will be able to deliver the goods. One cannot help but notice that Nov & Jan beans finish noticeably higher vs. March forward contracts closing lower. We still have concern over the dryness in the major soybean growing regions of Brazil as they are supposed to start planting now. Forecasts do suggest better rainfall by the end of next week and into the 3rd week of October. So much for China being holiday this week as they are still buying US soybeans. Given the large spec presence in the soybean market it will be up to the USDA to either confirm or deny. As I mentioned yesterday the trade is expecting to see lower production and higher demand on Friday.
The interior Midwestern soybean basis runs steady to mixed. The mixed portion has Savanna, Il improving by 3 cents and Davenport, IA easing by 2 cents. The Gulf strengthens from recent easing. The talk has the meal basis easing but I’m not seeing it. Where the Illinois River is closed the processor has a captive audience but where there is a choice between the river and the processor the competition for origination is hot. Meal spreads run similar to soybean spreads; noticeably strong upfront while not so much as one goes forward.
Given the price action of late one has to think the spec has become a huge long. Will the USDA help him out on Friday? Even if he doesn’t confirm the bullishness the trade is looking for spreads should stay strong just because our export market is so front end loaded. Also, if the USDA fails to confirm the trade’s bullishness but the forecasted rains for Brazil remain iffy whatever break ensues should be well received. Given China’s appetite for soybeans it is almost critical Brazil has somewhat of a respectable crop this season.
Daily Support & Resistance – 10/08
Nov Beans: $10.35 – ???
Dec Bean Meal: $354.0 – ???
Dec Bean Oil: $32.50 – $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 eclipse the high side of expectations.