May Soybeans closed 16 ½ cents higher ($14.49 ¾), July 14 cents higher ($14.36 ½) & Nov 10 cents higher ($12.84)
May Soybean Meal closed $5.3 lower ($407.5), July $4.9 higher ($411.3) & Dec $4.2 higher ($395.1)
May Soybean Oil closed 6 pts lower ($56.27), July 37 pts lower ($53.87) & Dec 8 pts lower ($47.76)
Weekly Soybean Export Inspections – 183.9 K T. vs. 100-400 K T. expected
I hope I’m not the only one that thinks old crop soybeans are tighter than a firecracker and they are not going to go away. A great example of this is the tightening export basis. We are not shipping all that many soybeans but the gulf basis is up 10 cents in the past 4 days while futures are up 50 + cents in the same time frame. That’s textbook bullish. New crop soybeans go along for the ride but to a lesser extent – the July/Nov spread has gained 20 cents in the past 4 days. Granted we need additional new crop soybean acres so we don’t have another year as tight as this. Some of the recent rationale is that if corn planting stays slow it may cause a switch to soybean acres. I’m not ready to say it will happen because it is so early. The US producer likes bushels so he will go as long as possible before he concedes it is too late to plant corn. Soybean meal is trying like crazy to show it has upside potential. The tighter crush margins get the more advantageous it is to higher meal prices.
It is needless for me to say the interior cash market for soybeans is strong – maybe I should say it is getting stronger as now the interior river locations have joined in with strengthening basis levels. The strength in the cash markets are saying old crop soybeans are hard to come by and as far as I’m concerned that will continue. Bottom line – spreads are strong wherever one looks.
As I suggested last week the worst case scenario for old crop soybeans is a continuation of their weeks’ old trading range affair. If I’m wrong it is because they came out the range on the topside. New crop soybean will remain biased to move higher until we get a better idea as to additional acres. I’m starting to get a bit stubborn about the soybean meal’s potential to move higher. My thought is that it’s no worse than what we saw last week. What can one say about soybean oil other than its downside appears limited at this point in time. Sure, bean oil has room to correct from a technical standpoint but I’m not sure it will get any worse than develop into a trading range affair.
The USDA reports soybean planting at 3% which is right in line with trade expectations. The 5-year average is 2%.
Daily Support & Resistance – 04/20
July Soybeans: $14.20 – $14.50 (?)
July Soy Meal: $406.0 – $420.0
July Soy Oil: $52.40 – $54.50 (?)
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.