Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 2 ½ cents lower ($8.85 ¾), Sept 2 ½ cents lower ($8.91 ½) & Nov 2 cents lower ($9.03 ¾)

August Soybean Meal closed $2.0 lower ($306.4), Sept $1.9 lower ($307.8) & Dec $1.9 lower ($312.5)

August Soybean Oil closed 28 pts higher ($28.01), Sept 28 pts higher ($28.13) & Dec 31 pts higher ($28.48)

What can I say that’s positive about the soybean trade on Tuesday? Nov beans traded below $9.00 but managed to close above that level. Bloomberg reports that the US trade negotiators are going to China next week. Other than these two items not much can be said as to the health of the soybean market. The meal market continues to dog it. Yes, bean oil traded higher but as far as I’m concerned it’s not much of a leader. With the announced face-to-face meetings next week in China I’m thinking the potential for good faith purchases on China’s part is increasing. Additionally the announcement of these meetings should prompt some renewed optimism for the soybean market.

Soybean spreads ran steady in the nearby but with a slightly bearish bias going forward. Interior basis levels are weakening along the Illinois River, a bit better on the Ohio River. Despite the lower Illinois River basis levels the Gulf appears to be jumping higher. I’m not sure what this is all about unless we have some August shipments to fulfill. Processors are showing no changes as Board crush margins have stabilized from the June slide. Nearby margins have developed into a sideways mode for most of July.

The chart action in soybeans is showing a broad triangulation succession of lower highs and higher lows dating back to early June. My thought this mode will continue for the near term until more is known as to the new announced meetings. As I mentioned earlier the meal market continues to dog it but support has not yet been violated. Bean oil, despite today’s higher price action, looks like it is going nowhere fast.

Daily Support & Resistance for 07/24

Aug Soybeans: $8.82 ($8.77) – $8.92 ($8.97)

Nov Soybeans: $9.00 ($8.95) – $9.10 ($9.15)

Dec Soybean Meal: $311.0 ($309.0) – $316.0

Dec Soybean Oil: $28.10 – $28.75

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.