Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 5 ¼ cents higher ($8.91), Sept 4 ¾ cents higher ($8.96 ¼) & Nov 4 ½ cents higher ($9.08 ¼)

August Soybean Meal closed $0.1 lower ($306.3), Sept $0.2 higher ($308.0) & Dec $0.3 higher ($312.8)

August Soybean Oil closed 29 pts higher ($28.30), Sept 30 pts higher ($28.43) & Dec 32 pts higher ($28.80)

USDA announces 100 K T. old crop soybeans previously sold to unknown have been CANCELLED

Weekly Soybean Export Sales – old crop vs. -100+300 K T. expected – new crop vs. 100-300 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 100-250 K T. expected – new crop vs. 50-150 K T. expected

Weekly Soybean Oil Export Sales – old crop vs. 8-22 K T. expected – new crop vs. 0-10 K T. expected

Soybeans get a minor bump higher on Wednesday. The announcement that US trade negotiators will meet with their Chinese counterparts in Shanghai next was the primary impetus. The thought is the China may do some “good faith” buying ahead of these meetings. The downside of that is China really doesn’t need any beans right now as their crush margins are pretty poor. This was evidenced by the USDA announcing an old crop cancellation of 100.0 K T. Most of the strength came in early in the day. Upside follow through was lacking as the meal market continues to be a dog. Continued strength in bean oil keeps the soybean market alive but that’s about it; just staying alive.

The interior soybean basis took on a mixed look Wednesday. Recent river weakness saw some reversing. Processor basis runs unchanged as board crush margins are maintaining the recent sideways trend. The Gulf basis for soybeans continues to be strong despite some minor midday easing. August led soybean spreads were firm. Sept to March soybean spreads ran fractionally mixed on the day. Offers to sell cash meal in the interior appear to be unchanged while the export market for meal bumps a bit higher. Meal spreads ran fractionally softer all the way out.

Soybean oil appears ready to test the topside of its recent trading range, $29.30 (Dec). If the longs here get excited they could run the market closer to $29.75. Soybean meal continues to dog it but suspected support, $309.0 Dec (the Memorial Day weekend gap), has yet to be tested. November soybeans continue to triangulate; a succession of higher lows and lower highs. Daily momentum indicators for November beans can’t read much more sideways. This suggests a burst one way or the other is coming but as of this writing I’m not sure which way. Can the Chinese buy enough “good faith” to pop it higher or will the idea of an increase in acres push the market lower? Given my indecision on this I’ll find something else to trade in the near term.

Daily Support & Resistance for 07/25

Nov Soybeans: $9.00 ($8.95) – $9.16

Dec Soybean Meal: $309.0 – $316.0

Dec Soybean Oil: $28.40 – $29.20

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.