Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 4 cents higher ($8.35 ½), August 4 cents higher ($8.42) & Nov 3 ¼ cents higher ($8.59 ¾)

July Soybean Meal closed $1.8 higher ($299.8), August $1.7 higher ($301.2) & Dec $1.7 higher ($307.3)

July Soybean Oil closed 24 pts higher ($27.24), August 24 pts higher ($27.37) & Dec 25 pts higher ($27.95)

Weekly Soybean Export Sales – old crop vs. 100-400 K t. expected – new crop vs. 200-600 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-250 K T. expected – new crop vs. 25-150 K t. expected

Weekly Soybean Oil Export Sales – old crop 5-25 K T. expected – new crop vs. 25-150 K T. expected

Tuesday night, early Wednesday additional short covering was seen throughout the soybean complex. The day’s highs were made shortly after the day session began and profit taking took over for much of the balance of the day. I don’t think the minor wave of profit taking was totally unexpected as July soybeans have rallied nearly 60 cents from Monday’s low to today’s high. Additionally; if one thinks we’re going to lose corn acres it is only natural to think we get some of those acres planted to soybeans. As far as the China/US trade rift is concerned all I’ve heard is “gum-flapping”. One of the lead US negotiators said he will be going to Beijing “soon”; no date has been scheduled. Overnight China reiterated they won’t be bullied. Just recently the WH announced a new aid package for soybean producers and pork producers. Word has it that it will take effect sooner vs. later. If true it should lend support to these two markets going forward. If you recall last fall when the direct payment plan was announced for old crop soybeans the market did indeed rally.

The interior soybean cash market sees just two changes on Wednesday; the Ohio River 1 cent lower and Savanna, IL 5 cents lower. The Gulf remains nothing special as far as I’m concerned. Soybean spreads were flat up front; old crop does gain the new crop. Interior offers to sell cash soybean meal have run unchanged dating back to the first of the month. The export market has gradually improving. Meal spreads were relatively flat through January but then saw improvement March forward.

Today’s rally filled the gap from 1 ½ weeks ago and closed below the gap. We may see some further backing and filling but I’m not expecting a whole lot. I would like to think we have rattled the cage of the spec shorts just enough that they have lost their aggressiveness to be short. I believe this holds true for the product markets as well. Fundamentally I don’t have justification for further rallies but form a technical standpoint I believe we’re supposed to be buying breaks to recently established support. Volatility has finally gotten off of its can; better trading markets lie ahead. If the corn market continues with its move higher soybeans just may tag along for the ride.

Daily Support & Resistance for 05/16

July Soybeans: $8.25 – $8.50

July Soybean Meal: $295.0 – 305.0

July Soybean Oil: $27.00 – $27.50

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.