Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 16 ¾ cents higher ($12.37 ¼), Jan 16 ¼ cents higher ($12.47) & March 16 ½ cents higher ($12.56 ¼)

December Soybean Meal closed $0.2  lower ($327.2), Jan $0.4 higher ($325.8) & March $0.8 higher ($326.2)

December Soybean Oil closed 105 pts higher ($63.14), Jan 101 pts higher ($62.63) & March 101 pts higher ($61.78)

Weekly Soybean Export Inspections – 2.103 M T. vs. 1.800-2.625 M T. expected

Weekly Soybean ProgressHarvested – 73% vs. 74% expected vs. 70% ave

Soybean oil is the leader of the products as it takes its cue from strong energy prices and strong rival veg oils. Soybean meal tried to go along for the higher ride but succumbed to inter-market spreading (buying bean oil / selling bean meal). Crush margins slip a bit after trading at $1.90 per bu. If the crush is indeed picking up the pace that would suggest they are processing for bean oil in turn creating excessive meal stocks. Soybeans started Sunday under a bit of pressure from beneficial weather in Brazil but it wasn’t long before bean oil’s influence took over and buoyed bean prices to the upside. Soybean export inspections favored the low side of expectations but 2.0 M T. is still 2.0 M T. and that amount is no slouch.

It’s a tale of two situations for cash soybeans. Processor basis stands tall while river locations stay under pressure. The midday at the Gulf was undefined. Soybean spreads ;ran fractionally better. A halt to harvest in a good portion of the central Midwest is behind that. Recent strength in the interior meal basis appears to have stabilized as meal spreads softened from recent strength.

As long as soybean oil refuses to sustain a break soybean prices will continue to stand in.  Energy prices and rival palm oil prices will continue to influence the soybean oil market and that in turn will influence the soybean market. I’m not sure soybean meal has much left to its recent rally especially if the pace of crush is improving. Today’s high in Dec meal, roughly $332.0, should be treated as an interim swing point.  If we can get back up above that level $340.0 or so is the next target. If we continue to stumble at the $330.0 level prices should drift back down to the $320.0 to $316.0 level.

Daily Support & in Resistance – 10/26

Jan Beans: $12.30 – $12.60

Dec Meal: $322.0 – $332.0

Dec Soy Oil: $62.00 – $64.25

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.