Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 17 cents higher ($8.89), August 17 cents higher ($8.95 ½) & Nov 17 cents higher ($9.15 ½)

July Soybean Meal closed $8.4 higher ($327.4), August $8.6 higher ($328.7) & Dec $8.7 higher ($335.9)

July Soybean Oil closed 5 pts higher ($27.78), August 6 pts higher ($27.90) & Dec 8 pts higher ($28.46)

Weekly Soybean Export Sales – old crop vs. 250-450 K T. expected – new crop vs. 0-200 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-250 K T. expected – new crop vs. 50-125 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 8-22 K T. expected – new crop vs. none expected

Is the US producer going to give up on trying to get corn planted (undressed fields) and switch to soybeans? The recent rally in soybeans has made this decision a real head scratcher. Some of the weather forecasters that are willing to make an all June forecast are suggesting an active weather pattern for the majority of the month. Granted demand for US soybeans is not very good but what happens if we can’t get the soybean crop planted in a timely manner. What happens if the summer stays wet as we know soybeans do best with a drier bias. The bottomline is that the spec shorts are on the run and they take most of their cues from technical considerations.

The Gulf eases off their basis and that in turn has the Ohio River easing its basis. Soybeans off of the Ohio River are able to miss the snarl at St. Louis so right they are more susceptible to the changes at the Gulf. Processors are enjoying higher crush rates but they are not raising their bids as they fell they have a captive audience due to the problems on the riverways. Soybean spreads ran fairly flat out to January and then bull spreading took over. Interior offers to sell cash soybean meal continue to be no big deal.  Gulf bids and offers for cash soybean meal do show a firm basis. Meal spreads ran steady to weaker upfront, leveled off August to Dec and then bull spreading took over once we got into the 2020 months; Dec gains on March.

So much for my idea to see some backing and filling in the soybean and soybean meal markets over the near term. The inability to take out Wednesday’s low prompted another run of short covering. Tomorrow is month end. That leads me to believe we will see additional short covering tomorrow. Daily price charts for soybeans and soybean meal continue to look extremely strong despite the rally we have already seen this week.

Daily Support & Resistance for 05/31

July Soybeans: $8.70 – $9.10

July Soybean Meal: $318.0 – $335.0

July Soybean Oil: $27.40 – $28.20

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.