Soybeans Commentary


Soybeans – Just My Opinion

Jan Soybeans closed 1 ¼ cents lower ($13.74 ½), March 2 ¼ cents lower ($13.72 ½) & July ¼ cent higher ($13.58 ¼)

Jan Soybean Meal closed $7.0 higher ($451.8), March $7.2 higher ($446.8) & July $5.6 higher ($438.2)

Jan Soybean Oil closed 63 pts lower ($43.13), March 96 pts lower ($42.63) & July 86 pts lower ($42.08)

USDA announces Soybean Export Sales – 132.0 K T. China

Weekly Soybean Export Inspections – 1.778 M T. vs. 1.000-2.000 M T. expected

Soybeans get caught between surging meal prices and correcting bean oil prices. Soybean meal was your clubhouse leader today. With Board crush margins getting slammed in recent days the processor may not be as willing to pay up for soybeans to turn into meal. The Argentine producer not willing to sell soybeans adds to the meal market’s vigor. Weekly soybean export inspections were nothing short of solid based on expectations. It is my opinion that there is enough rain around SA to sustain crop development for the time being. Forecasts for SA continue to suggest enough decent rains around (general coverage remains in question) to keep the drought bulls at bay for now. After going weeks without seeing soybean sales announced to China we’ve seen sale announcement two days in a row now. The idea is that the new crop from Brazil is going to be late so China is securing some quick shipment beans out of the PNW.

The interior Midwestern soybean basis runs mixed on the day. Decatur, IL jumps their bid by 11 cents while selected interior river locations run a bit easier. The Gulf basis eases just a touch at its midday posting but overall remains quite strong. Soybean spreads ran a bit easier within the old crop while old crop still manages to gain on the new crop. The old crop/new crop soybean spreads are entering a world of their own. The July/Nov spread closes above the $2.00 level for the first time since the bull run started and the first time dating back to the summer of 2014.

Despite the slightly easier close the soybean market’s uptrend remains intact as long as the meal market continues in its leadership role. The trade is looking for bullish numbers out of the USDA tomorrow. I find it interesting that the spec sector has gone into a consolidation mode with its net long positions despite the flat price continuing to move higher. Maybe it doesn’t mean much but I did notice the commercial was a net buyer for the past CFTC reporting week. Tomorrow brings us one of the most volatile trading days of the year. I’m not going to try and tell you what the reaction will be. Just remember one thing – the S-T-U is already extremely tight for this early in the marketing season. The world soybean market cannot handle any major shortfalls with the SA crop. Until more is known as to the SA crop size sharp downside moves will be short-lived.

Daily & Resistance – 01/12

March Beans : $13.35 – $14.25

March Meal: $429.0 – ???

March Bean Oil: $41.50 – $44.50

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