Soybeans Commentary


Soybeans – Just My Opinion

March Soybeans closed 8 ¼ cents higher ($14.48 ¼), July 3 cents higher ($14.53 ½) & November 4 cents higher ($13.38)

March Meal closed $4.2 higher ($404.7), July $3.0 higher ($401.8) & December $1.9 higher ($376.6)

March Bean Oil closed 41 pts higher ($64.34), July 26 pts higher ($63.96) & December 12 pts lower ($61.19)

Weekly Soybean Export Sales – 1.025 M T. old crop vs. 500 K – 1.300 M T. expected – 202.8 K T. new crop vs. 250-600 K T. expected

Weekly Soybean Meal Export Sales – 330.1 K T. old crop vs. 100-400 K T. expected – -99.0 K T. new crop vs. 0-200 K T. expected

Weekly Soybean Oil Export Sales – 12.2 K T. old crop vs. 0-35 K T. expected – -0.1 K T. new crop vs. 0-10 K T. expected

Weekly export sales for both soybeans and soybean meal were solid looking. Weekly export shipments came in 300 K T. greater vs. what was reported on Monday. Ag consulting agencies continue to downgrade the Brazilian crop in south, southeast areas. Soybean oil registers new contract highs from a continued strong palm oil market. Some of the early morning strength was trimmed as crude oil sold off and the dramatic strength in the US dollar is hard to ignore. Soybean meal realizes some resistance against the $410.0 level.

The interior soybean basis reads mixed today as the processor reads steady to easier while river locations run steady to better. The Gulf export market spikes higher at its midday posting. Back in December the Gulf basis for soybeans was sharply higher as Brazil had no soybeans to market. As we moved into early January that basis eased as it appeared Brazil was close to marketing some new crop soybeans. As of today the Gulf basis is as strong as we saw in December and the futures price is sharply higher. I guess that’s what a short crop out of Brazil will get you when you were zigging and you should have been zagging. Bottom line – bull spreads work throughout the complex and that’s not bearish.

New highs and new high closes for March soybeans; nothing bearish about that. Soybean oil pumps out a new contract high but not a new high close. Soybean meal continues with a grinding higher bias. Yes, the meal market still has some technical overhead resistance to deal with but I’m getting the impression it will deal with it and stay firm. The weather in SA has improved. Many say its too late for the Brazilian south, southeast while it remains beneficial for the crop in Argentina.  One item I can’t help but notice; the bean complex gives us plenty of opportunities to get long in recent days. It’s not as if the market is racing away from us and that is why it’s a difficult trade. We keep waiting for a bit more of a break and when we get it we start thinking the market is about ready to go bearish.

Daily Support & Resistance – 01/28

March Beans: $14.30 – ???

March Meal: $396.0 – $412.0

March Bn Oil: $62.90 – $65.00 (?)

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.