May Soybeans closed 1 cent lower ($16.20), July 2 ¼ cents lower ($15.87 ½) & Nov 19 ¼ cents lower ($14.14 ¼)
May Soybean Meal closed $1.9 higher ($444.4), July $0.5 lower ($442.3) & Dec $3.2 lower ($416.3)
May Soybean Oil closed 28 pts lower ($66.10), July 64 pts lower ($63.84) & Dec 83 pts lower ($57.07)
Weekly Soybean Export Inspections – 236.9 K T. vs. 100-300 K T. expected
The story in soybeans comes down to the old crop vs. the new crop. After the initial barrage of selling old crop soybeans were quick to steady up while new crop’s every attempt to bounce got sold. The tightness in the old crop soybean market is not going to go away. I’m not sure the USDA will reduce the old crop carryout by much on Wednesday but then again they will not tell you we are going o run out. New crop soybeans are all about the pace of planting and the idea planting conditions, based on forecasts, will not receive much of threat. On the surface the USDA could easily issue a bullish looking new crop supply-demand number using the March 31st acres. Granted we expect them to increase by the end of June but for now we’ll be looking at a historically low projected carryout for so early in the season. Who is going to believe what they have to say?
Interior cash soybean markets stay firm. Some river locations ease but that I think is more in response to beans needed at other locations. The processor continues to be the king of the hill with his basis and I doubt that is going to change anytime soon. Bull spreads should continue to work especially the old vs. the new.
As far as I’m concerned the selling we saw today in the old crop soybeans was just a correction. I believe the same for the old crop products as well. If old crop soybean are as tight as I think they are the high flying in the old crop is not yet over. New crop soybeans and products remain wide open for further selling as long as Mother Nature cooperates.
The trade was anticipating the pace of soybean planting to be at 40%. The USDA reports 42% planted vs. the 5-year average of 22% and 36% year ago. Soybeans emerged sits at 10% vs. the 5-year average of 4% and 6% one year ago.
Support & Resistance – 05/11
July Soybeans: $15.70 – $16.00
July Soy Meal: $436.0 – ???
July Soy Oil: $62.50 – $65.50
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