May Soybeans closed 19 ¼ cents lower ($15.49 ¾), July 19 ¾ cents lower ($15.19 ½) & Nov 19 ½ cents lower (13.42 ½)
May Soybean Meal closed $3.3 lower ($425.5), July $4.7 lower ($426.8) & Dec $5.3 lower ($407.1)
May Soybean Oil closed 124 pts higher ($66.45), July 1 pt lower ($60.88) & Dec 68 pts lower ($51.32)
I did not see any one thing to prompt today’s reversal in the soybean market other than 10 days in a row of higher prices. The tightness in the US soybean market is not going to go away unless we see major export cancellations and the crush stops dead in its tracks. Granted we have slowed these two demand sectors but the cash markets continue to suggest soybean origination is tough to come by. It was announced that Perdue is bringing in a boatload of Brazilian soybeans but this is not unusual given our current degree of tightness. Soybean meal continues to be the weak sister of the complex and will continue to be such until the crush completely shuts down. Soybean oil will continue to be the darling of the complex given the demand for renewable fuels and a modest slowing of the crush. Similar to corn new crop soybeans have the greatest room to correct especially if the planting weather cooperates. Sure, every year there are always some problem spots but as of this writing I’m not seeing anything grand scale.
Soybean spreads ran mostly steady out to November and then a bearish bias took over. I doubt we’ll see any May deliveries against the soybeans or the soybean oil. Soybean meal deliveries may entail a minor amount. The CEO of ADM talks about a 5 million planted acre increase, corn and soybean combined, vs. the most recent USDA data. I have to wonder, if true, how the split will play out. My idea is corn acres will increase th most just because the US producer is biased to more bushels.
Today’s technical reversal should prompt some further sell off but there is no way I can say the party is over. My bias is to put on our trading shoes and play the inter-day technical trade; basically fading the extremes as they appear for shorter term trading opportunities.
Daily Support & Resistance – 04/28
July Beans : $14.90 – 15.45
July Meal: $417.0 – $433.0
July Bean Oil: $58.90 – $62.40
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.