Soybeans Commentary

storck

Soybeans – Just My Opinion

March Soybeans closed 1 cent higher ($9.16), July ¾ cent higher ($9.42 ½) & Nov ¼ cent higher ($9.56 ½)            

March Soybean Meal closed $0.6 lower ($312.3), July $0.3 higher ($320.2) & Dec $0.1 lower ($325.3)

March Soybean Oil closed 13 pts higher ($29.51), July 13 pts higher ($30.11) & Dec 13 pts higher ($30.64)

Recent Estimates for 2019-20 Soybean Acreage – 86.2 million (Informa), 84.6 million (Farm Futures) vs. 89.1 million 2018-19 (USDA)

Confusing remarks from the Secretary of Commerce leads to a choppy two-sided trade in the soybean market on Thursday. I am not sure the complex can show us a more mixed trade vs. what we saw today. The recent trend in the products continues with bean oil gaining on soybean meal. Argentina continues to undercut the US in the global soybean meal trade. I’m not sure how to handle the fact that Argentina is undercutting the US with its meal sales using US soybeans. Soybean oil continues to get good fundamental support from its bio-diesel sector as well as from a higher palm oil market. It wasn’t that long ago that palm oil was a drag on bean oil prices. the latest on palm oil is that it is at 4 month highs. 4 months ago bean oil was about another 90-100 pts higher vs. where it is now. Going forward the trade will wish and hope for better Chinese business ahead of the trade meetings next week. In addition Brazilian weather will continue to be monitored for the balance of its maturing soybean crop that has been impacted by heat and dryness. Its one thing for the Brazilian soybean crop to continue to shrink but it’s another to get some business out of it.

The trend of the interior soybean basis is a choppy sideways. It seems that whenever we see locations make a move in one direction or another it doesn’t last. Board crush margins have moved into a sideways pattern since late December. The Gulf basis since the first of the year has moved in a sideways range as well; as low as 17 cents over the March bid to 30 over the March offer. Most soybean spreads read sideways to lower. Offers to sell cash meal are such to suggest crushers are not finding many buyers in the domestic market as well as the export market. Meal spreads continue to show a grinding lower trend.

The trend in the soybean market hasn’t changed; a sideways to higher grind dating back to mid-September. The outcome of the US/China trade talks will go far in dictating whether this trend continues or rolls over. The day to day activity continues to take its cue from rhetoric out of Washington as to personal opinions on how the trade talks will go or won’t go. The trend in soybean meal can’t get much more sideways. March meal has moved in a $20-$25 range dating back to early September; currently sitting just below midrange. Soybean oil has been a slightly better trading market but it too appears to be range bound. $29.50 to $30.00, as of this writing, looks to be formidable resistance. I’m showing an interim downtrend line just above today’s highs. Currently bean oil is showing a bit overbought based on daily momentum indicators.   

Daily Support & Resistance for 01/25

Mch Soybeans: $9.06 – $9.28

Mch Soybean Meal: $310.0 – 316.0 Mch Soybean Oil: $28.90 – $30.00

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.