March Soybeans closed 12 ¾ cents lower ($13.92 ½), July 10 ½ cents lower ($13.81) & Nov 3 ¾ cents lower (12.19 ¼)
March Soybean Meal closed $3.0 lower ($420.2), July $2.6 lower ($416.1) & Dec $0.7 lower ($377.8)
March Soybean Oil closed 57 pts lower ($50.77), July 56 pts lower ($48.24) & Dec 36 pts lower ($43.95)
Weekly Soybean Export Inspections – 879.5 K T. vs. 400-800 K T. expected
The Sunday night start for the complex was strong but like the corn market it was unable to sustain that strength as the session proceeded. May soybeans traded 18 cents higher early Sunday; traded 15 cents lower late Monday. Both product markets saw a similar trade; May meal $6.00 higher early, $4.00 lower late. – May soybean oil 65 pts higher early and 90 pts lower late. Weekly soybean export inspections came in better than expected but it seemed the trade wanted to focus on the lack of new sales. Realize that inspections reflect past sales that have already been priced into the market structure. Brazilian harvest continues to be slow; 25% done vs. year ago. Despite the slow harvest most involved continue to cite a strong crop size.
The interior Midwestern soybean basis reads steady to better with the processor showing the best prices. Interior river locations appear to be bouncing back from last week’s easing but this is being offset by lower Gulf values. May forward spreads were under pressure not only within the current crop year but also against the new crop. Offers to sell cash meal are steady in the interior and soft for export. Needless to say meal spreads were softening in response.
I’m beginning to develop the idea that old crop are moving into a trading range type atmosphere. After last week’s rally to new contract highs the idea was that it was a bit overbought. Friday’s break to the $13.80 level (May) the idea was we were a bit oversold. We are not going to solve the soybean tightness overnight but the day-to-day trading will stay rather volatile. Since mid-January the old crop soybean trade has been very consistent at fading the inter-day extremes. This type of price action has been noted in the meal market as well. Long story short – fade the inter-day extremes vs. chasing them. I’m not sure what to say about the price action in the soybean oil market other than today’s higher to lower suggests some further correction. If soybean oil decides to break hard it will give the meal market some left-handed support.
Daily Support & Resistance – 03/02
May Beans : $13.80 ($13.70) – $14.15
May Meal: $414.0 – $424.0
May Bean Oil: $48.40 – $50.00
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