Soybeans Commentary


Soybeans – Just MY Opinion

November Soybeans closed 11 cents higher ($12.06 ¼), Jan 9 ½ cents higher ($12.15 ½) & March 8 ¼ cents higher ($12.24 ¼)

October Soybean Meal expired $3.7 higher ($317.1), Dec closed $2.4 higher ($314.1) & Jan $1.6 higher ($315.4)

October Soybean Oil expired 58 pts higher ($59.94), Dec closed 85 pts higher ($60.44) & Jan 81 pts higher ($60.31)

Weekly Soybean Export Sales – old crop vs. 600 K – 1.400 M T. expected – new crop vs. 0-20 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-320 K T. expected – new crop vs. 0-20 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. -5 +30 K T. expected – new crop vs. 0-10 K T. expected

USDA Announces Soybean Export Sale – 132.0 K T. to Unknown

I think everyone will agree the soybean market was due for some sort of a bounce after the recent 3-day decline of 60 cents. I do find it interesting the decline came within a ½ cent of its March 31st low. Some of the factors behind today’ bounce in addition to technical considerations were better product prices (not just bean oil this time), a softening US Dollar, and a stabilizing interior cash market. The Gulf is also advertising a need for some soybeans. Harvest delays have provided some short term stabilization with interior cash prices. Soybean oil’s improvement today came from a strong energy market as palm prices saw a round of profit taking. The modest strength in soybean meal prices were due to short term oversold ideas. China continues to show interest in US soybeans but so far the announced sales are not all that inspiring considering the US supply. Weather in Brazil is becoming conducive to planting in Mato Grosso do Sul and Mato Grosso.

As I mentioned interior cash soybean prices have stabilized form recent declines. The nearby soybean spread traded out to a 12 cent carry early yesterday and into an 8 ¾ cent carry today. That suggests improving interest coupled with a slowdown in movement. Unfortunately I’m not holding my breath for much more improvement.

The technical look suggests today’s bounce in November soybean will start running into resistance as early as $12.20 and resistance will get stiffer from $12.30 to $12.40. The bounce in Dec meal should begin to develop issues if it can past the $318.0 level. The best that can be hoped for in the near term is a development of a trading range affair for the soybean and soybean meal markets. Soybean oil is a different animal here given its demand from the energy sector (bio-diesel) and the overall strength from competing veg oils.

Daily Support & Resistance – 10/15

Nov Beans: $11.90 – $12.25

Dec Meal: $310.0 – $318.0

Dec Soy Oil: $58.50 – $61.75

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.