Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed 14 cents higher ($14.01 ¾), July 11 ¼ cents higher ($13.79 ¼) & Nov 11 cents higher (11.90 ¾)

March Soybean Meal closed $2.1 higher ($438.7), July closed $1.6 higher ($433.0) & Dec $0.9 higher ($377.5)

March Soybean Oil closed 89 pts higher ($46.52), July closed 74 pts higher ($44.97) & Dec 83 pts higher ($42.00)

USDA Soybean Supply-Demand  Highlights

US – increases exports by 20 M bu. – just what the trade was looking for

World – cuts carryout by 950 K T. – just what the trade was looking for – left SA production numbers unchanged

The USDA Supply-Demand report gave the trade exactly what they were asking for. With that it prompted some “buy the rumor-sell the fact” trading. The pre-report high was $14.09 ½ and the post report lows was 13.77 ½; a 32 cent range. Next came the realization that our stocks-to-use ratio is 2.6 and the price came scrambling back up to finish within 8 cents of the pre-report high. Soybean oil continues to be the leader of the products as it zooms toward the suggested $48.00 resistance level. The USDA did tighten the bean oil carryout by 100 M lbs while leaving the meal carryout unchanged. With the S-T-U as tight as it is means the US will have to have price rationing going forward. That means slowing down exports as well as the crush. Soybean prices will have to stay strong to achieve this at least until the Brazilian harvest gets going full tilt.

The interior Midwestern cash soybean basis reads mostly steady. The midday posting at the Gulf reads unchanged vs. the past few days. Soybean spreads remain firm within the old crop and not as strong as one might expect vs. the new crop. It makes me wonder if the July/Nov saw its best when it traded to a $2.33 inverse back on January 13th.

$14.10 to $14.30 represents strong looking resistance on the March soybean chart. The same can be said for the $445.0 to $450.0 levels for March soybean meal. As far as the downside is concerned anyone staying friendly to both beans and meal will not want to see Monday’s low taken out on closing basis. So what about soybean oil? I’d like to see a challenge of the $48.00 level and then decide what to do next.

Daily Support & Resistance – 02/10

March Beans : $13.85 – $14.20

March Meal: $433.0 – $445.0

March Bean Oil: $45.80 – ???

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.