Nov Soybeans closed 10 ¼ cents higher ($10.44), March 10 ¼ cents higher ($10.37 ¼) & July 10 ¼ cents higher ($10.38 ½)
October Soybean Meal closed $1.8 higher ($358.5), Dec $1.7 higher ($356.0) & July $3.2 higher ($343.2)
October Soybean Oil closed 58 pts higher ($33.72), Dec 46 pts higher ($33.62) & July 41 pts higher ($33.58)
Weekly Soybean Export Inspections – 2.157 M T. vs. 1.200-2.200 M T. expected
Weekly US Soybean Crop Condition & Progress – 63% GE (-1%) vs. 64% expected vs. 54% year ago – Dropping Leaves – 93% vs. 90% 5-year average – Harvested – 61% vs. 59% expected vs. 42% 5-year average
Strong weekly export inspections coupled with talk that China is buying US soybeans for January delivery has Nov and Jan soybeans retracing 13-15 cents of yesterday’s sell off. Monday’s low saw barely a challenge. Some of the rationale behind the Chinese buying talk is that are becoming a bit fearful of Brazilian soybean exports being ready in January due to the delayed planting start. Forecasters do suggest better moisture is on its way but at this point in time the proof is actually seeing it. Soybean meal saw limited follow through selling from Monday but today’s bounce did not appear to be too re-assuring that more liquidation is not out there. Soybean oil was a slightly better performer today vs. meal but once again the price action did not appear to be too re-assuring to the bulls.
Like corn many interior Midwestern cash soybean locations have a defensive looking posture. The Nov/Jan spread ran steady on the day while the March contract had the strongest flat price performance. Once again I think this goes back to the idea exports out of Brazil may be less timely due to their delayed start to planting. Its hard to ignore the midday Gulf posting remains quite strong. Both the interior and export basis for soybean meal remains steady to firm. The Dec/Jan meal spread runs steady on the day while being noticeable losers to March forward. I’m guessing this price performance all has to do with the ongoing dryness in Argentina.
Today’s inside day of Monday in the soybean market does not change my mind that this market is in for some further correction/consolidation. I think this actin is warranted not because the soybean market has turned bearish but maybe because the trade is still a bit too long. Today’s rumor has China buying some cargoes out of the US for January delivery. Failure to confirm that tomorrow morning with a USDA announcement could easily prompt some additional selling. I repeat – I don’t think the soybean market has turned bearish but just moving into a technical correction mode. Soybean meal charts look similar. Driving forces going forward will be Chinese demand and SA weather, both Brazil and Argentina. Soybean oil charts look noticeably different given the 400 pt break prior to last week. Yes, we’ve retraced 300 of the 400 last week so it would not surprise me to see this market move into a sideways mode featuring lower highs and higher lows.
Daily Support & Resistance – 10/14
Nov Soybeans – $10.30 – $10.60
Dec Soy Meal – $350.0 – $363.0
Dec Soy Oil – $32.80 – $34.25
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.