Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 12 cents lower ($8.69 ¾), August 12 ½ cents lower ($8.76 ¼) & Nov 12 cents lower ($8.97 ¼)

July Soybean Meal closed $3.3 lower ($317.7), August $3.5 lower ($319.2) & Dec $3.7 lower ($326.3)

July Soybean Oil closed 27 pts lower ($27.22), August 26 pts lower ($27.37) & Dec 27 pts lower ($27.88)

Weekly Soybean Export Sales – old crop vs. 200-500 K T. expected – new crop vs. 50-250 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-250 K T. expected – new crop vs. 0-100 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 8-25 K T. expected – new crop vs. none expected

IEG Vantage (Informa) – is suggesting planted soybean acres at 85.037 million vs. the USDA at 84.617 million – average yield 51.1 bpa vs. the USDA at 49.5 leading to a crop size 4.313 billion bu. vs. the USDA at 4.150 billion bu.

The soybean complex goes along for the lower ride just as it went along for the higher ride but to lesser extents in both directions. On the way up the trade was buying feed grains and selling oilseeds and now it appears they are going the other way which in turns gives the soybean market some minor left-handed support. The bottom line is that all along I don’t think anyone got too bullish about the soybean scenario. With the recent clearing weather in many areas of the Midwest soybean planters are rolling. I have to think there has not been much thought of soybeans “prevent plant”. The latest forecasts suggest we should see some fairly good progress with soybean planting on next Monday’s planting report. That should lead to lower prices no matter what the feedgrains do.

The interior soybean basis continues to show a similar scenario to that of the interior corn basis. River locations that are having logistical problems don’t do much with their basis. Locations along the riverways that are not saddled with the logistical problems show better basis levels. Processors continue to stand in as crush margins stay good. The Gulf continues to show a firm bias reflecting the logistical problems further up river. Soybean spreads ran fractionally mixed out to November and then bear spreading was noted against January forward. Meal spreads ran fractionally mixed on the day.

Soybean and soybean meal daily charts look just as short term ugly as the corn and wheat charts. If one looks at all of the grain price charts and take them at face value (meaning just look at the charts and not factor in what commodities they represent) they all suggest the party is over for now. Volatility is not as great here vs what we are seeing in the corn and wheat markets so the complex’s intra-day and inter-day moves won’t be as severe. I still think we should selling rallies here especially if you’re worried about long feed grain positions.

Daily Support & Resistance for 06/06

July Soybeans: $8.64 ($8.56) – $8.79

July Soybean Meal: $312.0 – $322.0

July Soybean Oil: $27.00 ($26.75) – $27.60

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.