July Soybeans closed ¾ cent higher ($8.59 ¼), August 1 cent higher ($8.66 ¼) & Nov 1 ¼ cents higher ($8.87)
July Soybean Meal closed $1.0 higher ($314.4), August $0.9 higher ($315.6) & Dec $0.8 higher ($322.7)
July Soybean Oil closed 16 pts lower ($27.22), August 16 pts lower ($27.35) & Dec 16 pts lower ($27.86)
I saw nothing friendly about today’s supply-demand update. The old crop carryout was increased by 75 million bu. due to a like cut in exports. The USDA chose to leave new crop acres and yield unchanged. The only change in the new crop data was in the increased carryin of 75 million bu. which in turn increased the projected carryout by 75 million bu. Once again I saw nothing friendly in this data. World carryout projections, both old crop and new crop, saw just minor decreases (380 K T. and 450 K T. respectively). The only reason the soybean and soybean meal markets did as well as they did was spillover strength from the feedgrain sector. Given the numbers I’m seeing in corn vs. the numbers I’m seeing for soybeans I can almost say the spread between the two could easily challenge the $3.00 difference level.
Given some of the increases with the interior soybean basis I have to think cash movement remains minimal. Processors continue to show the best basis. River locations read mixed as some remain unchanged while a couple of other locations read a bit better. If I had to guess the recent logistical problems may be easing just a bit. Soybean spreads saw some minor fractional easing while meal spreads saw some fractional improvement. Offers to sell cash meal show a firming tone in both domestic offers and export offers.
Today’s “inside” day for both soybeans and soybean meal does nothing to change the current interim down trend. As I mentioned earlier the only reason these markets did as well as they did was the strength elsewhere in the Ag complex. It seems the mentality was “Gee, I can’t buy corn and wheat with double digit gains so I’ll buy soybeans instead”. A long time ago one of the most successful traders I had the honor of listening to said “you buy the most bullish and sell the most bearish”. I have to think that this is what the corn/soybean is developing into.
Daily Support & Resistance for 06/12
July Soybeans: $8.50 ($8.40) – $8.75
July Soybean Meal: $308.0 ($304.0) – $320.0
July Soybean Oil: $27.00 (426.70) – $27.80
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.