July Soybeans closed 9 ¾ cents lower ($8.22), August 9 ¾ cents lower ($8.28 ¾) & Nov 9 ¼ cents lower ($8.48 ½)
July Soybean Meal closed $2.0 lower ($295.3), August $2.1 lower ($296.9) & Dec $2.0 lower ($303.6)
July Soybean Oil closed 36 pts lower ($27.14), August 37 pts lower ($27.26) & Dec 39 pts lower ($27.84)
The soybean complex tries mightily to trade with the higher feedgrains but when push comes to shove it can’t. The potential loss of corn acres already has the trade thinking of additional soybean acres. Shortly after the noon hour it comes out that the current administration is contemplating direct payments to the soybean producer to the tune of $2.00 per bushel of soybeans. Once this came out soybeans broke hard as the rationale is this would act as a push to the US producer to plant more soybeans. As far as I’m concerned that is the last thing we need. I have to think this this is more political move than anything else; an effort to save his farm vote.
Not a lot of changes with the interior soybean basis. The Ohio River eases 1 cent from Monday’s 9 cent push higher and Toledo eases 5 cents. The Gulf edges higher which seem fear based in case new river problems develop due to recent rains as well as forecasted rains. Spreads ran fractionally mixed out to March of 2020. The July/Nov spread once again registers new contract lows. Not much happens with offers to sell cash soybean meal for domestic usage or for export. Meal spreads ran fractionally mixed on the day.
If you are a bulge buyer in the feed grains and you start to worry about buying the rally sell some soybeans against those purchases. As far as I’m concerned July soybeans could easily retrace back down to the $8.00 level. Given the sharp rally we saw in the first half of last week I don’t see anything that would offer support below $8.15 until $8.00. July meal may try and realize some support at $290.0 while better support is closer to $286.0.
Daily Support & Resistance for 05/22
July Soybeans: $8.15 ($8.05) – $8.35
July Soybean Meal: $290.0 – $299.5
July Soybean Oil: $26.75 – $27.45
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.