Soybeans Commentary


Soybeans – Just My Opinion

September Soybeans closed 4 ¾ cents higher ($8.60 ½), Nov 4 ¾ cents higher ($8.73) & Jan 4 ¾ cents higher ($8.86 ¾)

September Soybean Meal closed $0.7 higher ($294.7), Oct $0.7 higher ($296.6) & Dec $0.8 higher ($300.3)

September Soybean Oil closed 31 pts higher ($28.74), Oct 33 pts higher ($28.87) & Dec 33 pts higher ($29.12)

Weekly Soybean Export Sales – old crop vs. -200+100 K T. expected – new crop vs. 350-700 K T. expected

Weekly Soybean Meal Export Sales – old crop vs. 50-150 K T. expected – new crop vs. 50-200 K T. expected

Weekly Soybean Oil Export Sales – Old crop vs. 5-10 K T. expected – new crop vs. 0-15 K t. expected

It seems like late maturity rates with this year’s soybean crop continues to support the market at recent levels. As far as the US/China trade problems are concerned it seems like that it goes both ways on a day-to-day basis. Yesterday the man in the WH said he was not ready to make a deal. Today he said it looks like we’ll make a deal. I have to think the bottomline to all of this back and forth is his fear of losing the farm vote. Not only has he upset the soybean producer but now the corn producer as well with the recent waivers to blenders. Forecasts for the developing crop appear to be non-threatening at this time; cooler temps with rainfall. So far no one is indicating a frost going out three weeks or so but many feel the soybean plant will not complete its maturity cycle leading to an even smaller production.

Soybean processors appear to be standing “pat” with their respective basis levels. River locations continue to show a firming bias. The Gulf continues to improve. Soybean spreads ran flat up front, soft vs. March and May while March and May firmed against July forward. Offers to sell cash meal in the interior are such that they are still looking for buyers. Gulf meal is maintaining its recent firm tone. Meal spreads were a big nothing on Wednesday.

For the third day Nov beans find support in the mid-$8.60’s. Attempts to sustain rallies don’t go anywhere given decent weather for plant development. For the time being I’ll call it a mini trading range affair ($8.60 to $8.90) within a broader trading range affair ($8.50 to $9.00). The unknown around the soybean plant reaching final maturity will act as support while the lack of deal with China will act as resistance. The price pattern in Dec meal is similar. Short term we’re a trading affair between $295.0 and $305.0. Longer term there is support against the contract low ($291.60) and congestive type resistance closer to $315.0. For what it is worth Dec meal shows trendline resistance against $305.0 or so. This trendline has been in effect dating back to the summer highs. If soybean meal does start to perform I would expect to see Dec bean oil drift back down to the $28.50 level.

Daily Support & Resistance for 08/22

Nov Soybeans: $8.65 – $8.80

Dec Soybean Meal: $296.0 (?) – $305.0

Dec Soybean Oil: $28.60 – $29.50

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.