Soybeans Commentary


Soybeans – Just My Opinion

July Soybeans closed 14 ¼ cents lower ($8.85 ½), August 14 ¾ cents lower ($8.89 ¾) & Nov 14 ½ cents lower ($9.08 ½)

July Soybean Meal closed $8.3 lower ($304.8), August $8.1 lower ($307.2) & Dec $8.3 lower ($314.6)

July Soybean Oil closed 26 pts lower ($27.98), August 24 pts lower ($28.13) & Dec 24 pts lower ($28.59)

Weekly Soybean Export Inspections – 719.3 K T. vs. 450-750 K T. expected

Weekly Soybean Progress & Condition – 54% GE (unch) vs. 56% expected vs. 71% year ago – Planted – 92% vs. 93% expected vs. 99% 5-year average – Emerged – 83% vs. 95% 5-year average

On Friday the soybean market tried to garner some support from the lower than expected acreage report. That was not the case on Monday as new lows and closes were registered for the sell-off that started last week. Disbelief that soybean acres will be that low, the idea that crop conditions are improving and weakness in the feed grains found buyers few and far between. Earlier in the day there was a story that talked about hog losses in China being far greater vs. recent ideas. If true this would have Chinese soybean demand (for meal) far less than originally thought.

Interior cash soybean market is on the defensive with the break in the flat price. Board crush margins are taking it on the chin with the break in meal prices. I believe this is stemming from the idea that China will be taking fewer soybeans due to their hog losses not only from the US but from the rest of the soybean exporting World as well. Soybean spreads ran steady to fractional losses to November and then more noticeable losses after that. Meal spreads ran fractionally mixed out to January and then more noticeable losses after that.

The next level of minor support for November soybeans is roughly $8.90 to $8.80. After that we look at the Memorial Day weekend gap from $8.58 to $8.64 ½. Watch your meal market as that has become the soybean market leader. The meal market’s Memorial Day weekend gap is about another $4-$5 lower from today’s low. If meal can realize support at that level then I doubt soybeans have to go down to the $8.60 level (November). Soybean oil is the least weak within the complex but I have always questioned its leadership skills whether it’s up or down.

Daily Support & Resistance for 07/02

Aug Soybeans: $8.80 – $9.04

Nov Soybeans: $9.00 – $9.24

Aug Soybean Meal: $302.5 – $312.0

August Soybean Oil: $27.80 – $28.60

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.