May Soybeans closed 6 cents lower ($7.91), July 6 ¾ cents lower ($8.02 ½) & Nov 5 ¾ cents lower ($8.27 ½)
May Soybean Meal closed $0.1 lower ($284.0), July unchanged ($287.3) & Dec $0.5 lower ($295.5)
May Soybean Oil closed 15 pts lower ($26.35), July 18 pts lower ($26.61) & Dec 20 pts lower ($27.34)
Weekly Soybean Export Inspections – 513.3 K T. vs. 450-700 K T. expected – Cumulative 32.655 M T. vs. 48.31 M T. target
Weekly Soybean Crop Progress – 9% planted vs. 15% expected vs. 29% 5-year average
Despite the 14 ½ cent rally off of today’s low the soybean market remains severely oversold; 11.99 on the 14-day RSI for July and 11.16 for the November contract. A far as I’m concerned the “p.ss.ng” match between China and the US will not get any worse at least for the next few weeks. As far as further rally potential is concerned it will be up to WH as to what comments they can make to try and re-assure the American farmer that they will be taken care of. After all it is the soybean market that had the most to lose in this rift as China is our best soybean buyer. As far as last week’s USDA data is concerned the yield will remain questionable as we have the entire growing season ahead of us. As to final acres it depends on the “Prevent Plant” scenario for corn. I’m hesitant to tout the “Prevent Plant” for soybeans as we have many weeks ahead of us to get this crop planted.
It’s a mixed posting for the interior soybean basis. The Ohio River is a shade easier, Savanna, IL a bit better while Davenport, IA is easier. Processors show the best bids; Lincoln, NE is 5 cents better. Board crush margins are the strongest they have been dating back to last fall. The Gulf basis eases from last week’s firming attempt. Soybean spreads ran steady up front while old crop still loses to the new crop. The July/Nov spreads leaks out to a 25 cent carry; it hasn’t been much than this going back 3 years or so. Just remember that the old crop carryout (new crop carryin) has little to no chance of coming in. Until we see a legitimate crop scare of some sort soybean spreads will be inclined to stay wide.
Can we view the fact that July soybeans traded 9 cents below $8.00 but managed to close above that mark as positive for the market? The meal market tried to register an upside reversal as it registered new contract lows but failed to close higher on the day. The meal market remains oversold but not as dramatically vs. the soybean market. The 14-day RSI for July meal is 23.5. The USDA gave us some strong looking data for new crop soybean oil but this market still remains vulnerable to the whims of the palm oil market. I can’t sell anything within the soy complex so I will look for signs within the coming price action that suggests support is trying to materialize.
Daily Support & Resistance for 05/14
July Soybeans: $7.94 – $8.09
July Soybean Meal: $284.0 – 289.5
July Soybean Oil: $26.30 – $26.85
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.