Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 3 ¾ cents higher ($13.90 ¼), August 1 ½ cents lower ($13.65 ¼) & Nov 7 ¾ cents lower ($13.19 ½)

July Soybean Meal closed $1.9 lower ($355.3), August $1.9 lower ($356.8) & Dec $2.4 lower ($362.5)

July Soybean Oil closed 51 pts lower ($64.25), August 58 pts lower ($60.48) & Dec 51 pts lower ($59.18)

USDA announces Soybean Meal Export Sales – 122.2 K T. new crop sold to Mexico

Weekly Soybean Export Sales – old crop vs. -100+275 K T. expected – new crop vs. 200-500 K t. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-350 K T. expected – new crop vs. 50-250 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 0-15 K T. expected – new crop vs. none expected

Soybeans are another market that tries to rally in the night session only to fade during the day session. This MO held true for the product markets; higher last night only to fade to modestly easier levels in the day session. For the time being its all about the short term forecasts calling for a fair amount of moisture for Illinois east. Rain amounts for Iowa are iffy at this point while it appears the Dakotas/Minnesota will be mostly out of the mix for these forecasted rain events. Granted the current call for moisture will be great for the health of the soybean plant but we have to remember soybean are made in August not the first half of July.

On Monday the USDA will update both old crop and new crop supply demand. Little to no change is expected for the old crop soybean carryout. The USDA will use the new June 30th planted and harvested acres. Normally they don’t adjust harvested acres or yield on this report. If they stay consistent with this procedure crop size will stay unchanged with what we saw in June. Trade ideas are suggesting a slight downward adjustment in yield leading to a crop size 11 M bu. lower vs. what we saw in June and a carryout 7 M bu. lower. As of this writing the new crop carryout projection will remind us of another potentially tight marketing season. Heaven help us if Brazil has problems.

Weather considerations will dominate the new day and a half of the inter-day trade. Tuesday’s low, $13.00, is considered immediate support for Nov beans. After that we look at $12.90 followed by $12.60. Dec meal appears to be caught in a mini trading range between $355.0 and $370.0. Volatility is the name of the game for soybean oil. The Dec bean oil chart is strikingly similar to the Nov soybean chart. As of this writing neither one gives me any warm and fuzzies.

Daily Support & Resistance – 07/09

Nov Beans: $13.00 ($12.90) – $13.40

Dec Meal: $355.0 – $370.0

Dec Soy Oil: $58.00 ($57.00) – $61.00

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.