Soybeans Commentary


Soybeans – Just My Opinion

January Soybeans closed 26 cents lower ($13.65 ¼), March 22 cents lower ($13.77 ¼) & July 19 cents lower ($13.94 ¾)

January Soybean Meal closed $7.3 lower ($423.7), March $7.3 lower ($408.9) & July $7.2 lower ($406.5)

January Soybean Oil closed 110 pts lower ($58.18), March 93 pts lower ($58.44) & July 85 pts lower ($58.59)

Weekly Soybean Export Sales – 735.7 K T. old crop vs. 400 K – 1.200 M T.  expected – 183.0 K T. new crop vs. 0-450 K T. expected

Weekly Soybean Meal Export Sales – 104.3 K T. old crop vs. 10-350 K T. expected – -0.8 K T. new crop vs. 0-10 K T. expected

Weekly Soybean Oil Export Sales-2.9 K T. old crop vs. 0-25 K T. expected – -0.1 K T. new crop vs. 0-15 K T. expected

Weekly soybean export sales continue to disappoint. Today’s break is all about the relief forecasts for the hot & dry areas of southern Brazil and Argentina beginning this weekend and into next week. The forecasted rains and cooler temps are expected to stop the bleeding (yield loss). Many believe irreparable damage has occurred, but the question is how much. As far as I’m concerned total global soybean supply is still large while factoring in some of the touted losses.

Interior river locations involved with export read lower. Soybean processors continue to stand in. The Gulf midday posting continues to show an exceptionally strong basis. Soybean spreads softened all the way out to the new crop. Attitudes are that it will be sooner vs. later that newly harvested soybeans out of Brazil will cut into the current demand at the US gulf. Interior cash meal offers are mixed; truck offers are steady to better while rail offers read steady to lower. The gulf basis for meal stays firm. Meal spreads, like the soybean spreads, leaked wider reflecting the overall liquidation.

Tomorrow is Friday and we have a 3-day weekend coming at us. Come Monday night we should be able to see if the forecasted weather has become a reality or not. Forecasts going forward will be scrutinized for evidence of a trend change in the current hot & dry. If the forecasted rain event is going to be just a one-time relief event prices will realize support sooner vs. later. If the forecasted weather is more than a one-time event, given the extent of the speculative long, further liquidation could easily take March bean prices down to the $13.40 level before trying to realize support. Just remember that 3-day weekends during a weather market are notorious for changing trends.

Daily Support & Resistance – 01/14

March Beans: $13.65 ($13.55) – $13.89

March Meal: $400.0 – $415.0

March Soy Oil: $57.50 – $59.50 (?)

The risk of trading futures and options can be be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.