May Soybeans closed 6 cents higher ($14.18 ¾), July 5 ¾ cents higher ($14.11 ¼) & Nov 2 ¼ cents higher (11.71 ¼)
May Soybean Meal closed $0.1 higher ($406.4), July $0.4 higher ($408.5) & Dec $3.5 lower ($390.2)
May Soybean Oil closed 111 pts higher ($53.92), July 83 pts higher ($52.00) & Dec 60 pts higher ($47.65)
Soybean Oil continues to be the complex leader. Higher palm prices along with continued bio-diesel demand just doesn’t let this market sustain a break. Soybean meal continues to get the short end of the stick from inter-market spreading (buying bean oil selling bean meal) as well as nothing special demand. Old crop soybeans get caught in the middle of all this. Like corn we saw a shift in the recent spread motion now buying old crop selling new crop. The Supply-Demand report on Friday should act as a reminder of the tight old crop soybean scenario while the idea of a decent planting rate could keep the new crop under pressure. If the planting season goes unheeded it will be interesting which market, corn or soybeans, picks up the most additional acres. The failure to pick up more soybean acres pretty much guarantees another extremely tight year.
Not much happens with the interior river soybean locations as demand for export remains slack. The processor, on the other hand, continues to look for soybeans. The gulf basis continues to be no great shakes. Bull spreads work for soybeans, soybean meal and soybean oil. The bull spreading acts as a reminder of just how tight old crop soybeans are.
July soybeans fail to sustain last week’s rally into new high ground. Does this make old crop soybeans bearish? If the USDA fails to tighten the old crop carryout on Friday July beans will develop into a trading range affair between $13.50 and $14.50. If the USDA does tighten the carryout on Friday we will move back to the highs we saw last week. The last two days of activity looks like a minor upflag – this suggests we should be selling rallies in the near term. As long as the soybean meal continues to dog it soybeans will struggle to sustain a major rally despite the continued strength in soybean oil.
Daily Support & Resistance – 04/07
July Beans : $13.95 – $14.30
July Meal: $403.0 – $416.0
July Bean Oil: $51.00 – $53.40
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