Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 20 ¾ cents higher ($17.09 ½), Sept 11 ¼ cents higher ($15.20 ¼) & Nov 20 ¾ cents higher ($14.48 ½)

August Meal closed $4.6 higher ($520.2), Sept $6.9 higher ($456.5) & December $4.6 higher ($412.4)

August Bean Oil closed 141 pts higher ($71.97), Sept 192 pts higher ($69.30) & December 163 pts higher ($67.62)

Weekly Soybean Export Sales – -66.7 K T. old crop vs. -100+200 K T. expected – 477.2 K T. new crop vs. 300-700 K T. expected

Weekly Soybean Meal Export Sales – 90.8 K T. old crop vs. 50-200 K T. expected – 311.2 K T. new crop vs. 75-325 K T. expected

Weekly Soybean Oil Export Sales – 0.6 K T. old crop vs. 0-12 K T. expected – no new crop vs. 0-10 K T. expected

USDA announces Soybean Meal Export Sale – 103.4 K T. new crop sold to Mexico

Will the US have enough old crop soybeans to bridge over to the new crop? Given what August soybeans are doing one might not be so sure. Interesting to note that Sept loses noticeably to November suggesting it won’t be too long before we see Delta soybeans moving to the Gulf. Spot basis at the Gulf continues to be astronomical; the midday posting was $2.50 bid / $3.25 ask basis November. The CIF basis for Sept is $1.70 ask / 1.80 ask basis November. The spot truck meal basis also suggests the lack of old crop soybeans especially in the eastern Midwest. Rail basis offers of meal stay strong as does the Gulf basis.

Weekly export sales for old crop were once again a negative number (no surprise) while new crop sales favored the low side of expectations. New crops soybean sales should show improvement next week given the recent announced sales. New crop meal sales were almost impressive looking. Old crop soybean export shipments continue to lag projections by 4.5 M T. with 3 ½ weeks to go for the old crop marketing year. It is my thought that whatever shortfall we have will eventually be offset by a lower crop size for the past year.

The latest forecasts suggest another shot of heat in the west over the next few days followed by noticeably cooler temps over much of the Midwest. Unfortunately the dry bias will continue despite the cooler temps. The CPC says the current La Nina won’t begin to fade until the coming December. Remember that a La Nina weather pattern means dryness not only for the US but also for a good portion of the growing areas of SA.

The price action is suggesting traders are expecting a bullish soybean report from the USDA tomorrow. Long term weekly charts for November soybeans, December soybean meal and December soybean oil are all showing a bullish bias going forward. I’m showing some daily trendline resistance for November soybeans in the mid-low $14.60’s but after that $15.00-$15.25. Both product markets show similar potential to move higher.

Daily Sport & Resistance – 08/12

Nov Beans: $14.03 – $15.10

Dec Meal: $404.0 – $430.0 (?) 

Dec Bean Oil: $65.00 – $72.00

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