Soybeans Commentary


Soybeans – Just My Opinion

Nov Soybeans closed 6 cents higher ($10.62 ¼), March 3 cents higher ($10.45 ½) & July 1 cent lower ($10.41)

December Soybean Meal closed $8.5 higher ($372.1), March $4.8 higher ($357.2) & July $3.8 higher ($349.6)

December Soybean Oil closed 71 pts lower ($33.17), March 69 pts lower ($33.10) & July 67 pts higher ($33.07)

USDA announces Soybean Export Sales – 261.0 K T. sold to China

Weekly Soybean Export Sales – old crop vs. 1.500-2.200 M T. expected – new crop vs. none expected

Weekly Soybean Meal Export Sales – old crop vs. 100-350 K T. expected – new crop vs. none expected

Weekly Soybean Oil Export Sales – old crop vs. 0-30 K T. expected – new crop vs. none expected

After seeing lower prices in the Wednesday night session prices quickly rallied out of the hole once the day session started. The overnight easiness stemmed from recent rains in SA and forecasts for more in the coming days. The rally out of the nighttime hole came from another round of Chinese purchases as well as idea the La Nina pattern in SA will favor a drier bias going forward. I’m told the Argentine crushers strike has been ended by the government but that did not stop the meal market from eclipsing  the highs from last by a few ticks but also registering a new high close. I’m thinking the strength in meal is due to the competition in origination between the processor and the exporter. Soybean oil takes it on the chin from lower palm prices as fears of a slowing global economy are cited.

The interior Midwestern cash soybean basis is starting to noticeably jump higher at locations involved for export. This is in response to Gulf basis levels continuing to move higher. After a brief run of profit taking the Nov/Jan spread is back to being a fractional inverse. Inverses are featured all the way out to the new crop with only one exception; the May/July which is at a 2 cent carry. These inverses reflect the fear of a poor SA crop. They are also signaling the market wants your soybean NOW. Soybean meal has a similar looking spread scenario. Despite soybean oil taking it on the chin today slight inverses are being noted there as well.

The price action in soybean remains bullish despite only finishing 3-6 cents higher. Whats bullish is November finishing 25 cents off of the early morning low. There is nothing bearish about soybean meal registering new contract highs (by 4 ticks) and registering new contract high closes. Despite the poor price action in soybean oil I can see technical support below current levels.

Daily Support & Resistance 10/16

Nov Soybeans: $10.45 – $10.75

Dec Soy Meal: $364.0 – ???

Dec Soy Oil: $32.60 – $33.90

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