Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed 32 ¾ cents higher ($14.40), July 30 ¼ cents higher ($14.50 ½) & November 15 ½ cents higher ($13.34)

March Meal closed $8.5 higher ($400.5), July $8.5 higher ($398.8) & December $3.4 higher ($374.7)

March Bean Oil closed 54 pts higher ($62.51), July 61 pts higher ($61.72) & December 78 pts higher ($60.24)

Weekly Soybean Export Sales – old crop vs. 500 K – 1.300 M T. expected – new crop vs. 250-600 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-400 K T. expected – new crop vs. 0-200 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 0-35 K T. expected – new crop vs. 0-10 K T. expected

On June 7th of last summer March soybeans traded $14.45 ½. Today’s high was $14.43 ¾. Rhetoric out of RGDS talks about an 8.0-9.0 M T. crop loss. A prominent consultancy in Brazil talks about Brazilian exports this coming season at 85.5 M T. Earlier this month the USDA suggested Brazil would export 94.0 M T. Soybean oil flirts with the $64.00 level goaded on by continued strength in the palm oil and crude oil markets. And soybean meal goes along for the ride. For what it is worth the soybean meal export market continues to edge higher and the current spate of cold weather increases domestic usage. For what it is worth – China’s New Year celebration starts next week. Normally we don’t see much from them during this period. Was today’s front end led rally about some buying from them before their holiday?

Most interior soybean basis locations run unchanged. If there are any changes they are higher. The gulf soybean basis continues to move higher. Soybean spreads firmed noticeably; not only within the current crop year but also the old crop/new crop spreads. I’m not seeing any changes with the interior meal basis but as I mentioned earlier the export basis for meal continues to firm. Meal spreads firmed modestly within the crop year. The most notable strength was in the old crop new crop meal spreads.

The technical price action in soybeans and soybean oil looks strong. Of course it does as there is nothing bearish about new highs and new high closes for the current rally. New crop is no slouch either, advances just not as strong as the old crop. Soybean meal has some technical resistance to deal with as it approaches the $410.0 level. Going forward – the soybean market will take its cue as we fine tune Sa soybean production and its impact on the US balance sheet. Soybean oil will continue to take its cue from the goings on in the palm and crude oil markets. And soybean meal goes along for the ride.

Daily Support & Resistance – 01/27

March Beans: $14.16 – $14.54

March Meal: $392.0 – $408.0

March Bn Oil: $62.70 – $64.50

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.