January Soybeans closed 3 ¼ cents lower ($13.59 ¼), March 3 ½ cents lower ($13.68) & July 2 ¼ cents lower ($13.79 ½)
January Soybean Meal closed $1.1 higher ($415.9), March $0.8 higher ($409.1) & July $0.4 higher ($404.1)
January Soybean Oil closed 17 pts lower ($56.55), March 18 pts lower ($56.67) & July 15 pts lower ($56.66)
If we look at the net changes on the day it was not much of correction when compared to Monday’s closes. If we look at where we closed vs. the day’s highs then we did have a correction. Dry concerns in southern Brazil and parts of Argentina continue to be the primary driving force behind the soy complex’s strength. There is some light scattered moisture in the forecast for these areas of concern later this week and into the weekend. The emphasis is on “light scattered”. Overall I’ll call today some year-end profit taking due to ideas of a modest overbought scenario.
I’m not seeing any changes with the interior soybean basis. The processors still shows the best basis levels despite recent softening. The spot Gulf basis continues to strengthen. The forward time slots have not responded to recent ideas that the harvest ready soybeans in Brazil are being delayed to excessive moisture. The adage there is that it’s still early. The nearby soybean spreads run fractionally mixed while March & May lose to July. Despite the minor reversal in the flat price old crop soybeans continue to gain on the new crop. The interior meal basis had been softening in recent days; today it showed a sharp turn round. The meal export basis remains fully steady. Meal spreads continue to show a narrowing bias.
Because it’s year end its my thought the trade will honor today’s minor flat price reversal (soybeans) for the balance of the week. Granted soybean meal still finished fractionally higher I think the highs we saw today will act as highs for the balance of the week. Daily technical data for soybean meal still shows a modest degree of overbought. Soybean oil will also move into a correction/consolidation phase for the next few days. It’s still my thought that the meal/oil spread has seen its best for the near term.
Daily Support & Resistance – 12/29
March Beans: $13.50 – $13.78
March Meal: $400.0 – $414.0
March Soy Oil: $55.75 – $57.50
The risk of trading and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.