Nov Soybeans closed 5 cents higher ($11.43 ¼), March 7 ½ cents higher ($11.51 ½) & July 8 cents higher ($11.44 ¼)
December Soybean Meal closed $2.1 lower ($392.7), March $1.3 lower ($387.2) & July $0.2 lower ($378.8)
December Soybean Oil closed 107 pts higher ($37.13), March 97 pts higher ($36.81) & July 79 pts higher ($36.28)
Soybean oil carries the ball on Wednesday. Palm oil was the primary influence as it traded to an 8-year high. This was enough to keep the soybean market alive as soybean meal prices eased from the highs seen Tuesday, early Wednesday. The extreme strength in soybean oil blew away the contract highs that were set in January of 2020. As far as I’m concerned the soybean market still has room to move higher given what the USDA gave us Tuesday. Realize the drawdown in the carryout came from a reduction in production, not an increase in demand. As long as the trade has questions around the potential success of the SA growing season due its dry bias the impetus for higher prices will remain. I think soybean meal is balking at the $400 T. level which is only natural because we haven’t seen it since the spring of 2018.
Interior river locations for soybeans are still showing defensive posturing. The Gulf for soybeans continues to slide. I have to ask the question, “Is the Gulf at capacity for soybean loading?” While locations involved for export are sliding the processor continues to stand in. Soybean spreads ran mixed on the day; Jan loses to July while the old crop consolidates vs. the new crop. The infamous July/Nov spread traded up to $1.21 over last night then slid back to $1.10 over during the day. Both the interior and export basis for soybean meal has a bit of easing happening. As I mentioned earlier I think some end users are balking a bit at the high prices. Meal spreads saw some noticeable easing in the nearbys vs. the summer months.
Short term technical considerations suggest don’t be surprised to see some attempts at correction/consolidation. Longer term I think the potential is still there for higher prices. Just how high we go will be dictated by SA weather as well as new demand. Right now it looks like the Chinese buying may have slowed down while the weather for SA is still not the best for a good start for their crop; rains are too scattered and not all that heavy.
Daily Support & Resistance – 11/12
Jan Soybeans: $11.36 – $11.62 (?)
Dec Soy Meal: $388.0 – $402.0
Dec Soy Oil: $36.50 – $38.00
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