Soybeans Commentary

storck

Soybeans – Just My Opinion

May Soybeans closed ¼ cent lower ($8.98 ¾), July ¼ cent lower ($9.11 ¾) & Nov ½ cent lower ($9.32 ¼)              

May Soybean Meal closed $1.2 higher ($309.2), July $1.2 higher ($312.9) & Dec $1.2 higher ($320.6)

May Soybean Oil closed 27 pts lower ($28.88), July 28 pts lower ($29.20) & Dec 25 pts lower ($30.02)

Weekly Soybean Export Inspections – 888.1 K T. vs. 600-900 K T. expected – Cumulative 30.187 M T. – Target 51.03 M T.

Soybeans are caught between falling soybean oil and steadying soybean meal. Market bulls still talk about the possibility of a US/China trade deal sooner or later. After last week the idea was we might get a deal in 4 weeks; over the weekend I read opinions that suggested 4-6 weeks. Tomorrow the USDA will update old crop Supply-Demand. Depending on which news wire poll you want to follow average estimates for the old crop carryout range from 898 million bu. to 912 million bu. (900 million bu. in March). Personally I’ll go with the higher number.

The interior soybean basis has a mixed look to it. The processor still shows the best basis. River locations read mixed as some are higher, some steady and some a bit easier. The Gulf soybean basis continues to ease from the highs we saw on April 1st. Soybean spreads ran steady to fractionally better. Offers to sell cash meal are mixed looking. Where weather had been a factor in recent weeks, now abating, has meal offers firming ever so slightly. Elsewhere offers are running unchanged but as far as I’m concerned they continue to be cheap. Meal at the Gulf runs unchanged. Meal spreads run steady to fractionally better out to Jan 2020.

When it comes to old crop soybeans I’m a lost soul. Fundamentally I cannot justify current levels; too high. Sure, I understand what a trade deal with China could bring us but the window for old crop is rapidly closing. As we move forward SA origin should dominate the World market. Last time I looked the US is not competitive for the balance of the old crop season and the US is not competitive for most of the new crop season. I understand the spec is net short but I’ve seen bigger. On Friday the CFTC said the spec is net short 91.7 K contracts of soybeans as of April 2nd. At the end of last October they were short 132.5 K contracts of soybeans.  Price charts continue to show a broad trading range affair for soybeans featuring a well-defined down channel dating back to early February. The past 5 days of price action, I believe, is setting us up for another run to the downside. This idea holds true for the meal market as well.       

Daily Support & Resistance for 04/09

July Soybeans: $9.00 – $9.19

July Soybean Meal: $308.0 – 315.5

July Soybean Oil: $28.85 – $29.45

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.