Soybeans Commentary


Soybeans – Just My Opinion

November Soybeans closed 7 ¼ cents higher ($12.44), Jan 7 ¾ cents higher ($12.56 ¼) & March 8 ¾ cents higher ($12.67)

December Soybean Meal closed $8.1  higher ($337.2), Jan $7.1 higher ($334.3) & March $6.4 higher ($335.2)

December Soybean Oil closed 2 pts higher ($61.99), Jan 2 pts lower ($61.67) & March 5 pts lower ($60.98)

Soybeans hold their own on Tuesday receiving support from the soybean meal market and inter-market spreading vs. a declining wheat and corn market. Soybean meal sees their best prices since their upside retracement rally started on October 14th. I did not see any one item targeting the meal market for today’s rally other than inter-market spreading (meal vs. beans, meal vs. bean oil). Offers from the processor remain recently high suggesting demand may be finally picking up. Crush margins remain strong with the meal market finally contributing while the bean oil market takes a breather. Soybean oil had a relatively tight range today; trading 40-50 pts either side of unchanged.

Between a currently strong export market and a strong crush market the interior soybean basis remains strong from just about all participants. All of the interior locations rolled to basis January today and they all are reflecting better basis levels. The only location not showing a better basis is the Gulf as their roll to January reflected the current 12 cent spread. As I mentioned earlier offers to sell meal remain high. Meal spreads got back everything and then some of what they lost yesterday.

I was beginning to wonder if Dec meal was ever going to challenge the $340.0 resistance level. Now it appears to be right around the corner. January soybeans continue to bang up against the suspected resistance, $12.60 to $12.70. I’m still not sure what to make of the price action in soybean oil; is it in the process of establishing an interim H&S top with a rally to the $63.20 level being a right shoulder? I find it interesting that both beans and meal have nearly identical price action dating back to mid-October. I have to wonder if next Tuesday’s USDA production/S&D update tops these tow markets out.

Daily Support & in Resistance – 11/03

Jan Beans: $12.40 – $12.70

Dec Meal: $330.0 – $340.0

Dec Soy Oil: $60.50 – $63.00

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.