Nov Soybeans closed 31 ¾ cents lower ($10.33 ¾), March 22 ½ cents lower ($10.25 ¾) & July 17 cents lower ($10.28 ¼)
October Soybean Meal closed $6.4 lower ($356.7), Dec $9.4 lower ($354.3) & March $6.4 lower ($345.4)
October Soybean Oil closed 101 pts lower ($33.14), Dec 85 pts lower ($33.16) & March 76 pts lower ($33.18)
Weekly Soybean Export Inspections – Tomorrow
Weekly US Soybean Crop Condition & Progress – Tomorrow
Wham Bam Slam!! No new demand news (the USDA was closed today) and better weather starting to materialize for Brazilian soybean planting has the soybean market erasing the past 4 days of gain. Adding to the rational for selling/profit taking is the idea that the spec/funds are too long. The latest COT report (as of last Tuesday) suggests this sector of the trade is the longest they have been dating back nearly 10 years. Not only did this wave of selling it hit the soybean market it hit the product markets as well. Given that the US projected carryout has been cut so drastically so early in the marketing year I have to think there will be a lot of emphasis on the success or failure of the Brazilian growing season. Yes, their planting season is off to the slowest start in the past 10 years but if the current forecasts come to fruition the planers will be rolling in short order. Going forward it will all be about further Chinese demand and the Brazilian growing season.
Most interior Midwestern cash soybean markets (basis) are under pressure. I’m told producer selling is barely short of outstanding. The midday Gulf posting is only slightly easier vs. the Friday afternoon’s post. The nearby Nov/Jan took a big hit; down 7 cents from Thursday’s trade at a 4 cent inverse. The Nov/March spread on Friday traded at a 32 cent inverse; today it trade down to a 7 cent inverse. This suggests we have enough soybeans in the pipeline to satisfy most needs at least for now. It also puts a bit of risk premium back into the March/May time slots as this is when the World is focusing on exports out of Brazil. I’m not seeing any easing with the Meal basis but spreads there mirrored the spread action in the soybean market.
From Friday’s high to today’s low Nov beans have corrected 48 cents. When this rally started in early August the biggest correction we saw prior to the latest was 49 cents. The most recent leg higher was 94 cents; we are currently right at the 50% retracement. Not to be a purest I do see better looking support closer to the $10.20 level. Price patterns in soybean meal appear to be similar. Because we had no USDA demand news today (meaning announced sales) the trade will be cognizant of that; maybe not quite as weak looking. tomorrow morning as well as what is the latest on the Brazilian weather front.
Daily Support & Resistance – 10/13
Nov Beans: $10.25 – $10.50
Dec Bean Meal: $348.0 – $364.0
Dec Bean Oil: $32.75 – $33.90
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