Soybeans Commentary

storck

Soybeans – Just My Opinion

March Soybeans closed 3 ½ cents higher ($14.41 ¼), July 7 ¾ cents higher ($14.26) & Nov 7 ¾ cents higher (12.62)

March Soybean Meal closed $0.9 higher ($419.2), July $0.3 higher ($414.9) & Dec $1.4 lower ($381.2)

March Soybean Oil closed 109pts higher ($55.15), July 96 pts higher ($52.40) & Dec 82 pts higher ($48.24)

USDA Supply-DemandUS – left all demand data unchanged leaving carryout unchanged – World – increased production 740 K T. – increased total usage 1.47 M T. – increased carryout 380 K T.

There is nothing bearish about a 120 M bu. soybean carryout. But since the trade was looking for a slight cut to both the US and the World a modest sell off ensued. Needless to say prices didn’t stay down for very long. I did find it interesting that the USDA increased the size of the Brazilian soybean crop (+1.0 M T.) despite all of the recent chatter of unchanged to lower.  It is my belief that CONAB will be out with their updated ideas Thursday morning. Soybean oil continues to trade in a world of its own as it continues to rocket higher. Soybean meal continues to be a drag on the soybean market but it did mange to register a minor interim upside reversal as it made new lows for the past 6 weeks yet managed to finish slightly higher. New crop soybeans managed a new high close despite not registering a new flat price high.

Given the old crop soybean S-T-U (2.6 %) attempts to sell the market off just don’t last. Prices need to stay firm to kill off any new demand. I have to think any new demand would tack a dollar onto the price in relatively short order. So what’s a good price target for soybean oil? Back in 2012 weekly charts show a double top against the $57.50-$57.75 level. Is the market overbought? It sure is. We can currently break this market 355 pts back down to the $50.00 to find some technical looking support. Will the meal shorts take heed of today’s minor attempt to reverse. Right now there is a tremendous amount involvement in the long soybean oil/short soybean meal spread. I have to think if that spread were to start unraveling a $20 boost to meal prices would not be out of the realm of possibility. A $20.0 rally in meal would still have old crop meal prices in the same trading range it has been in dating back to mid-January.

Daily Support & Resistance – 03/10

May Beans : $14.34 – $14.60 (?)

May Meal: $414.0 – $423.0  

May Bean Oil: $52.25 – ???

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