Soybeans Commentary

storck

Soybeans – Just My Opinion

March Soybeans closed 3 ½ cents higher ($14.37 ¾), July 4 ½ cents higher ($14.18 ¼) & Nov 7 cents higher (12.54 ¼)

March Soybean Meal closed $1.7 lower ($418.3), July $1.6 lower ($414.6) & Dec $0.7 lower ($382.6)

March Soybean Oil closed 68 pts higher ($54.06), July 67 pts higher ($51.44) & Dec 81 pts higher ($47.42)

Weekly Soybean Export Inspections – 587.5 K T. vs. 400-800 K T. expected

Sunday night starts out like a ball of fire as both old crop and new crop soybeans register new contract highs as does the soybean oil market. The impetus behind the old crop soybean market is the slow rate of harvest in Brazil as well as the droughty conditions in Argentina. Soybean oil is all about a tight global veg oil market and an expanding bio-diesel market. New crop soybeans stay firm as it fights for acres vs. corn. These markets’ strength came early Sunday night and spent the balance of the session into the day session fading back. The drag on soybeans continues to be the meal market as processors are currently crushing for bean oil which in turn creates excessive meal stocks. The end result of all this had soybeans finishing with only modest gains, soybean oil with decent gains and soybean meal slightly lower. Some of the fade was attributed to easing energy prices, a stronger US Dollar and forecasts suggesting Argentina could see some beneficial moisture late this week and into next week. Tomorrow the USDA will update the old crop soybean carryout. Trade ideas suggest a decline of 3 M bu. from the February estimate. Overall I have to think the old crop soybean market will stay firm in its efforts to squelch demand to keep the supply-demand scenario from getting any tighter. New crop soybean will stay firm until we see acreage intentions at the end of the month. Soybean meal will continue to dog it as long as we continue to maintain our current rate of crush.

The Midwestern soybean processor continues to have the best bid structure out there. River locations run mostly steady with a slightly easier bias. The Gulf basis for soybeans continues to show a soft look as evidenced by the nothing to write home about weekly export inspections. Soybean spreads had a bearish bias all the way through the new crop. Meal spreads ran fractionally mixed out to August.

Granted soybean finished noticeably off of the Sunday highs I’m still not seeing anything sustainably bearish to its respective price charts. Price rationing will have to continue to insure we don’t run out of soybeans and/or we completely kill demand. The slow rate of Brazilian harvest has some thinking it will keep our export window open longer than originally thought. That may be but so far I haven’t seen any new business come our way. What demand we are seeing is still probably too much. If we can slow down the rate of crush the meal market may be able to sustain a rally but not until then. One thing we can be sure of – lots of inter-day volatility.

Daily Support & Resistance – 03/09

May Beans : $14.20 – $14.60 (?)

May Meal: $413.0 – $425.0 (?)  

May Bean Oil: $51.75 ($51.00) – $53.50

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