Soybeans Commentary

storck

Soybeans – Just My Opinion

May Soybeans closed 5 cents higher ($15.82), July 4 cents higher ($15.42 ¼) & Nov 19 ½ cents higher (13.82 ¾)

May Soybean Meal closed $0.8 higher ($424.3), July $2.9 higher ($424.4) & Dec $2.5 higher ($404.9)

May Soybean Oil closed 121 pts lower ($66.74), July 12 pts lower ($63.46) & Dec 134 pts higher ($55.84)

Weekly Soybean Export Sales – old crop vs. -100 +200 K T. expected – new crop vs. 100-600 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 50-300 K T. expected – new crop vs. 0-25 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. -10 +25 K T. expected – new crop vs. none expected

Given the bear spread action in the soybean oil market this is their way of suggesting it is in a correction phase. It’s the bull spread liquidation that is boosting the new crop as well as the idea we may not have enough acres going forward to satisfy the demand for vegetable oil. One has to realize that the demand for renewable fuels as gotten to the point it has created a new viable demand base in addition to food demand. Soybean meal still struggles to make a major advance as the US is still crushing enough soybeans to satisfy our current demand base. Until the crush slows down to the point where it tightens up the meal supply prices will remain range bound. I can’t help but notice July soybeans’ struggle to advance past the $15.50 + level. I don’t think this makes the market bearish just appropriately priced for what we currently know. The inability to advance beyond this level may prompt some liquidation but in no way do I think the bull party is over. Processors continue to bid 60 to 75 cents over because there just isn’t that many soybean out there. New crop gets support from spread liquidation as well as its fight to garner more acres. Next Wednesday the USDA will give us their first look at the new crop supply-demand. It is my thought they will have to use the March 31st acres and the yield they outlined at their February Outlook Conference. Unless they slash demand the carryout projection won’t be much better vs. what we are looking at right now for the old crop.

Daily Support & Resistance – 05/06

July Beans : $15.25 – 15.50

July Meal: $416.0 – $430.0

July Bean Oil: $61.75 – $64.50

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