Soybeans Commentary

storck

Soybeans – Just My Opinion

Nov Soybeans closed 5 ¾ cents lower ($10.50 ¾), March 2 ¾ cents lower ($10.45 ¼) & July 1 ¼ cents lower ($10.42)

December Soybean Meal closed $3.5 lower ($375.1), March $1.0 lower ($359.2) & July $0.1 lower ($349.7)

December Soybean Oil closed 42 pts lower ($33.19), March 35 pts lower ($32.89) & July 22 pts lower ($32.85)

Weekly Soybean Export Inspections – 2.082 M T. vs. 1.500-2.500 M T. expected

US Weekly Soybean Crop ProgressHarvested – 87% vs. 91% expected vs. 83% 5-year average

The soybean complex continues in its recent liquidation phase. Most of the Sunday night session saw soybeans and soybean oil in the minus column while soybean meal did not deviate too far from unchanged. The Monday morning opening saw soybean meal spike higher that took soybeans to just higher on the day. The rally in meal failed to new lows on the day and that took the soybean market back down to the minus side for the balance of the day. Soybean oil stayed modestly depressed for most of th day. I’m not sure what the rationale was behind the early meal rally. Soybeans for the most part were on the defensive due to a recent slowing of Chinese demand along with better planting conditions for north-central Brazil. Southern Brazil and a good portion of Argentina continue to show a dry bias. Weekly export inspections came in at mid-range of expectations.

The interior soybean basis at river locations that feed down to the Gulf are noticeably lower. The midday posting at the Gulf came in a shade. Spreads continue to be under the gun further aided by an increase in deliveries against the November contract. The soybean meal basis continues to stand in with recent firmness. Meal spreads started the day firm but gave way when the early flat rally failed. With basis levels failing at interior river locations it has taken away some of the recent competitiveness between the processor and the exporter.

The price action in the soybean market still looks like it is in a liquidation phase. I’ve been with the idea we would see a 60 cents correction from last week’s high. So far it has only been 43 cents. Prior to today the soybean meal charts have resembled a minor upflag. Today’s failure to sustain the early rally suggests we have more downside here; something closer to $360.0 level (Dec). I find it interesting that soybean oil could not mount a rally today to coincide with the sharp turn around in the crude oil market. Long story short – its my opinion that the entire soybean complex still has some downside issues to deal with.

Daily Support & Resistance – 11/03

Jan Beans: $10.38 – $10.60

Dec Bn Meal: $367.0 – $380.0

Dec Bn Oil: $32.60 – $33.60

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