Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 1 ¼ cents higher ($8.79), August 1 ¼ cents higher ($8.85 ¾) & Nov 1 ½ cents higher ($9.06 ¼)

July Soybean Meal closed $0.8 lower ($320.5), August $0.7 lower ($322.0) & Dec $0.1 lower ($329.1)

July Soybean Oil closed 25 pts lower ($27.34), August 24 pts lower ($27.48) & Dec 24 pts lower ($28.07)

Weekly Soybean Export Inspections – 498.7 K T. vs. 400-650 K T. expected

Weekly Soybean Crop Progress – Planted – 39% vs. 42% expected vs. 79% 5-year average – Emerged vs. 19% vs. 56% 5-year average

Today’s two-sided price action in soybeans suggests the trader is not quite sure what to do. We have tariffs (China) and tariff potential (Mexico) hanging over the market’s head. Are we going to plant more soybean acres due to “prevent plant” in corn? Granted we are behind in the 5-year planting rate no one has brought up “prevent plant” issue for soybeans. A long time ago I was told you can plant soybeans up to early July and if everything goes right one can still have a decent crop. I will admit that I do have forecasters suggesting majority of the month of June will feature above normal moisture. As the soybean plant develops it is not fond of staying too wet.

The interior soybean basis if not steady is a bit weaker. Interior locations that are shipping/loading points read steady to easy given the ongoing logistical problems (high water). Processors continue to stand in despite today’s downturn in Board crush margins. Overall Board crush margins remain quite good. The advertised Gulf posting for soybeans is not as high as the May postings but the June postings are improving. Soybean spreads ran flat upfront but gradually lost ground to the new crop. As I mentioned earlier index fund rolling by the smaller funds has already started; the “big boy’ fund rolling starts at the end of the week. If I was an index fund manager I would be rolling to the new crop as that is where the best potential for higher prices lies.

We’ve talked a little bit about the fundamental rationale for the soybean complex going forward now its time to look at the technical rationale. If one looks at a soybean or soybean meal chart a case can be made that we are making interim highs. We made highs on Wednesday, tried to sell off on Thursday, challenged the highs on Friday and sold off again. Monday’s trade saw a couple of attempts to rally only to fail each time. I use the term “interim” high because we still have the entire growing season ahead of us.

Daily Support & Resistance for 06/04

July Soybeans: $8.60 – $8.95

July Soybean Meal: $314.0 – $327.0

July Soybean Oil: $27.00 – $27.90

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.