Soybeans Commentary


Soybeans – Just My Opinion

August Soybeans closed 8 ½ cents lower ($8.82 ½), Sept 8 ½ cents lower ($8.87 ¾) & Nov 8 ½ cents lower ($8.99 ¾)

August Soybean Meal closed $2.4 lower ($303.9), Sept $2.5 lower ($305.5) & Dec $3.0 lower ($309.8)

August Soybean Oil closed 3 pts lower ($28.27), Sept 2 pts lower ($28.41) & Dec 1 pt lower ($28.79)

Weekly Soybean Export Sales – -78.2 K T. old crop vs. -100+300 K T. expected – 223.7 K T. new crop vs. 100-300 K T. expected

Weekly Soybean Meal Export Sales – 87.3 K T. old crop vs. 100-250 K T. expected – 140.0 K T. new crop vs. 50-150 K T. expected

Weekly Soybean Oil Export Sales – 3.6 K T. old crop vs. 8-22 K T. expected – 9.2 K T. new crop vs. 0-10 K T. expected

Weekly export sales were nothing to write home about then not much was expected. Chinese purchases remain absent but cancellations are not. The talk is that the Chinese government will only allow Chinese private companies to buy 3.0 M T exempt of tariffs. I’m told that even with purchases exempt of tariffs SA origin is still a better deal. The soybean meal market continues to be a dog and it looks like the recent soybean oil rally may be running out of steam. I’m developing a sneaky suspicion that planted soybean acres may be somewhat higher vs. what the USDA has previously outlined (just my opinion). That and the poor demand would help explain the inability to sustain a rally.

So what’s going on with the Ohio River with the higher basis? Processors continue to stand in. Board crush margins have been mostly sideways for the month of July. Illinois River basis is slipping. The Gulf basis continues to grind higher. Soybean spreads were flat up front while being bearish to the deferreds. Offers to sell cash meal suggest a firm undertone due to slow soybean movement. Meal spreads were fractionally improved out to Jan ’20 and then eased going forward.

For what it is worth Dec Meal filled its Memorial Day weekend gap. Unfortunately the ensuing bounce appeared to be severely lacking. I know a number of people did not want to see November beans close below $9.00. Does $8.99 ¾ count? Today’s outside day with the close below the previous day’s low does present an ominous appearance. It sure looks like $8.90 is in the cards to be tested sooner vs. later. It will be interesting to see if and when a Chinese announcement is made how the trade will handle its ensuing rally. Today’s price action in bean oil, new highs for the current 5-day rally and closing fractionally lower, suggests this market may have gone high enough for now.

Daily Support & Resistance for 07/26

Nov Soybeans: $8.95 ($8.90) – $9.10

Dec Soybean Meal: $307.0 ($305.0) – $313.0

Dec Soybean Oil: $28.50 – $29.10

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.