August Soybeans closed 4 ¾ cents higher ($16.19 ½), Sept ¾ cent higher ($14.64) & Nov 8 ¾ cents lower ($14.00)
August Meal closed $0.4 lower ($498.7), Sept $1.1 lower ($436.4) & December $6.0 lower ($399.1)
August Bean Oil closed 61 pts higher ($69.20), Sept 35 pts higher ($65.35) & December 35 pts higher ($64.32)
USDA announces Soybean Export Sale – 132 K T. new crop to China
Weekly Soybean Export Inspections – 867.5 K T. vs. 300-750 K T. expected
Weekly Soybean Crop Condition & Progress – 59% GE (-1%) vs. 59.5% expected vs. 60% year ago – Blooming – 89% vs. 86% 5-year ave – Setting Pods – 61% vs. 66% 5-year ave
The new crop soybean trade continues to be rather erratic. The early going Sunday night saw November soybeans down 15 cents or so but it did not last very long (just moments). By the wee hours of the morning they traded as much as 12 cents higher. The balance of the session was spent see-sawing back and forth between 12 cents lower and 6 cents higher. Recent announced soybean export sales are working to offset the question of where’s China. Old crop soybeans remain firm from a lack of deliveries. This is nothing new has soybean deliveries have been few and far between for a number of months now. The transition from old crop to new crop will not be for the weak of heart. It remains my idea that the USDA overstated last year’s crop size. How else can we explain some of these exorbitant basis levels. Weather impacts are similar to what we are seeing in the corn market. The idea that we have pretty decent conditions in the eastern Corn Belt is offsetting the effects of the hot & dry in the western reaches. Longer term forecasts do suggest the heat will abate some but the dry bias will remain and eventually spread into the parts of the eastern belt.
The interior soybean basis levels run mixed on the day. We are still seeing some sky high basis levels but that’s due to going basis November. Nobody wants to get caught in a possible old crop squeeze. The midday posting at the Gulf runs undefined. Old crop will continue to gain on the new crop for the balance of the month and quite possibly into September.
Given the recent volatility in the soybean market can I get away with the idea that November soybeans will trade between $13.50 and $14.50 from now until Friday morning? I feel certain about $13.50 being support. $14.50 is not giving the bulls enough leeway. I think everyone will agree the soybean meal market is a bit too nutso. The sharp rally we saw on Thursday then reversed on Friday followed by today’s slack looking performance suggests the party may be over here. Please note this observation is for new crop as old crop could very easily remain up for grabs. Soybean oil has the best fundamental support given recent changes in bio-diesel regulations. In the short run December bean oil may stumble from $66.00 to $68.00. Longer term $58.00 to $56.00 looks like pretty decent support.
Daily Sport & Resistance – 08/09
Nov Beans: $13.85 – $14.50
Dec Meal: $395.0 (?) – $416.0 (?)
Dec Bean Oil: $62.50 – $67.20
The risk of trading futures and options can be substantial. Each investor must consider whether this he technical is a suitable investment. Past performance is not indicative of future results.