Soybeans Commentary


Soybeans – Just My Opinion

May Soybeans closed 1 ¾ cents lower ($8.39 ½), July 2 ¼ cents lower ($8.51 ¾) & Nov 1 ¾ cents lower ($8.73)

May Soybean Meal closed unchanged ($296.0), July $0.2 higher ($300.3) & Dec $0.1 higher ($306.8)

May Soybean Oil closed 20 pts lower ($27.38), July 23 pts lower ($27.65) & Dec 22 pts lower ($28.39)

Weekly Soybean Export Sales – Old crop vs. 400-800 K T. expected – New crop vs. 0-100 K T. expected

Weekly Soybean Meal Export Sales – Old crop vs. 150-375 K T. expected – New crop vs. none expected

Weekly Soybean Oil Export Sales – Old crop vs. 7-30 K T. expected – New crop vs. none expected

After trading nearly 10 cents lower the soybean market managed to give us a bounce. At one point soybeans were higher on the day but failed to sustain that rally but did manage to finish only modestly lower on the day. We can still say new contract lows along with new contract low closes. The meal market saw a similar performance but did manage to finish fractionally higher on the day. The bean oil market was not as fortunate as it closed near its recent contract lows registering a new contract low close. I have to think the bounce in the soybean and soybean meal markets came from oversold considerations. Going forward the soybean market will continue to have a tough time sustaining much of a rally as new crop product from SA is dominating the world market. If it stays too wet in the Midwest to impede corn planting it will get you more soybean acres. Last but not least; the US/China trade talks. Most involved say talks are going well with the recent face-to-face meeting. Nothing is final but there are rumblings that China may be in the process of removing some of its tariffs on US soybeans.

Not much has changed with the interior soybean basis as it continues to have a firm undertone led by the processor. Board crush margins are such that the processor continues to stand in. River problems continue with high water and that leads to a firm Gulf. Soybean spreads continue to show a bias to widen due to the ongoing lack of export business. The infamous July/Nov spread continues to linger just above contract lows. Offers to sell cash meal continue to be uninspiring. I would hate to think where the meal market would be without our domestic business. Meal spreads ran mostly unchanged on the day.

Soybeans almost registered an upside reversal on Wednesday. The meal market did register an upside reversal by a fraction or two. The best that can be said from a technical standpoint is that at least we have some prices below the market (today’s lows) that we can lean against. It will be interesting to hear if the rumblings today around tariffs being lifted are true or not.

Daily Support & Resistance for 05/02

July Soybeans: $8.46 – $8.63

July Soybean Meal: $298.0 – 303.5

July Soybean Oil: $27.45 (?) – $28.20

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.