Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 30 cents lower ($11.98 ¼), Jan 29 ¾ cents lower ($12.10) & March 29 ½ cents lower ($12.20 ½)

October Soybean Meal closed $3.3 lower ($312.9), Dec $4.1 lower ($313.0) & Jan $4.3 lower ($315.0)

October Soybean Oil closed 167 pts lower ($58.62), Dec 166 pts lower ($58.85) & Jan 163 pts lower ($58.87)

Weekly Soybean Export Inspections – 1.611 M T. vs. 650 K – 1.200 M T. expected

Weekly Soybean Crop Progress / Condition – 59% GE (+!%) vs. 58% expected vs. 63% year ago – Dropping Leaves – 91% vs. 89% 5-year ave – Harvested – 49% vs. 50% expected vs. 40% 5-year ave

USDA increases soybean production by 75 M bu., increases yield by 0.9 bpa, leaves harvested acres unchanged and raises the US carryout by 135 M bu. World soybean carryout was increased by 5.68 M T. The USDA increased the crush by 10 M bu. while leaving exports unchanged. Although the trade was looking for increased production numbers these were greater than anticipated and demand is not keeping pace. Stocks-to-usage jumps to 7.27% vs. 4.2% last month vs. 5.6% year ago.

It looks like the USDA is projecting a record sized US soybean crop as well as a record sized Brazilian soybean crop. Couple this with China cutting back on its crush due to energy conservation it suggests prices need to go lower to find new demand. As far as I’m concerned there is nothing bullish about a 320 M bu. US carryout nor a 104.0 M T. world carryout. Nov beans may try and honor its March 31st low at $11.84 first time down there. Dec meal is looking oversold but so far that has failed to garner any interest. Bean oil looks like it has defined its top end with last Friday’s suggested reversal. If bean oil is indeed going to move into a liquidation phase it will be up to the oversold meal market to step up and provide support to the soybean market. That may be hard to do given how strong crush margins are; the processor will continue to crush to capitalize on his near $1.37 per bushel.

Daily Support & in Resistance – 10/13

Nov Beans: $11.84 (?) – $12.15

Dec Meal: $310.0 (?) – $317.0

Dec Soy Oil: $58.00– $60.00

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.