Soybeans Commentary


Soybeans – Just My Opinion

May Soybeans closed ¼ cent higher ($8.17 ¾), July ½ cent higher ($8.30 ¾) & Nov unchanged ($8.53)

May Soybean Meal closed $3.4 lower ($288.4), July $3.4 lower ($293.2) & Dec $2.2 lower ($300.6)

May Soybean Oil closed 3 pts lower ($26.81), July 3 pts lower ($27.10) & Dec 1 pt lower ($27.85)

It was a two-sided trade for soybeans on Tuesday that led to fractional changes on the day. The meal market was under pressure for most of day due to the idea that Argentine meal exports are close to ramping up. Not much was happening in the bean oil market; a two-sided trade with slight losses. The outcome of the Chinese/US trade talks at the end of the week hangs over the market given the recent WH threats of additional tariffs. The slow rate of corn planting is giving thoughts to additional soybean acres if it lasts past the end of the month. Despite the earlier idea of lower soybean acres guesstimates for Friday’s supply-Demand reports do feature some sizable carryout projections.

The interior soybean basis is steady to the processor. Board Crush margins saw a noticeable correction to day. I’m looking at some river locations improving their basis which seems a bit strange to me given all of the high water problems out there. I’m assuming these are locations that can bypass the areas of constriction. Soybean spreads within the old crop ran pretty flat on the day while old crop gains fractionally on the new crop. Offers to sell cash soybean meal in the interior remain quiet but still depressed looking. Bids at the Gulf are holding onto recent improvements while offers are hard to find. Meal spreads were steady upfront but after that additional amounts of carry within the price structure were featured.

The soybean market remains in a legitimate state of oversold. The 14-day RSI for July beans is 17.3 and for November 16.0. Normally these RSI counts would attract some bottom picking but with the China/US trade talks later this week hanging over the market (WH additional tariff threats) the trade has adopted the stance of “not me”. It’s hard to say which way these talks will go given the volatile nature of the WH’s stance on this subject. I can’t advocate selling current levels given the extreme RSI counts so I will too adopt the stance of “not me”.

Daily Support & Resistance for 05/08

July Soybeans: $8.22 – $8.41

July Soybean Meal: $291.0 (?) – 296.0

July Soybean Oil: $26.60 – $27.40

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.