Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 11 ½ cents lower ($9.01 ¾), Sept 11 ¼ cents lower ($9.07 ¾) & Nov 11 ½ cents lower ($9.20)

August Soybean Meal closed $3.2 lower ($311.6), Sept $3.2 lower ($313.3) & Dec $3.3 lower ($318.2)

August Soybean Oil closed 3 pts lower ($28.28), Sept 2 pts lower ($28.41) & Dec unchanged ($28.79)

Weekly Soybean Export Inspections – 854.3 K T. vs. 500-800 K T. expected

NOPA June Crush – 148.8 million bu. vs. 154.4 million bu. expected (this is a 21 month low for the NOPA Crush)

Weekly Soybean Condition & Progress – 54% GE vs. 53% expected vs. 69% year ago – Emerged – 95% vs. 99% 5-year average – Blooming – 22% vs. 49% 5-year average

The soybean price action pretty much mirrors the price action in corn; higher Sunday night and then fading during the day on Monday. The Weather story is pretty much the same as outlined in the corn comment; some moisture this week for the eastern Corn Belt, staying relatively hot in the western Corn Belt and temps moderating some next week. For what it is worth I have heard soybean planting from eastern Iowa east to Ohio as late as late last week. Some of last week’s hype was from trade negotiators suggesting China would be buying Ag products very soon as a gesture of good faith now that trade talks have resumed. To date I have no indication of any Chinese buying.

With the exception of the Ohio River (slightly higher) the majority of the cash soybean locations are running steady to easier. This includes the Gulf as well. The tropical storm was not as fierce as originally anticipated and export demand remains nothing to write home about as evidenced by the just okay export inspections. The much lower than anticipated monthly NOPA data just acts as another highlight of the mediocre soybean demand. Soybean spreads ran flat upfront and fractionally weaker as one goes further out. Meal spreads ran mostly steady with only minor fractional changes out to May of 2020.

I’m ready to call the soybean market another market that is entering into an interim trading range affair. Basis November I’ll call it an $8.85 to $9.45 trading affair. Beneficial weather will act as resistance as will the lack of any actual Chinese buying. Any return to hot and dry after forecasted rain events fall short of expectations along with WH reassurances that China will soon begin buying will act as support.  The bottomline is that the August 12th USDA should answer any questions around acreage. Yield however will remain up in the air through the month of September. So how does one trade trading range markets – you fade short term inter-day extremes for short term trading opportunities. The product markets should be viewed in the same light. When soybeans are trying to move higher expect a better performance from the meal market and when soybeans are going down expect a better performance from the bean oil market.

Daily Support & Resistance for 07/16

Aug Soybeans: $8.94 – $9.12

Nov Soybeans: $9.10 – $9.32

Aug Soybean Meal: $308.0 – $315.5

August Soybean Oil: $27.90 – $29.60

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.