Soybeans Commentary


Soybeans – Just My Opinion

September Soybeans closed 10 ½ cents higher ($8.53 ¾), Nov 10 ¾ cents higher ($8.67 ¼) & Jan 9 ¼ cents higher ($8.80 ½)

September Soybean Meal closed $3.1 higher ($293.0), Oct $3.2 higher ($295.0) & Dec $3.2 higher ($298.6)

September Soybean Oil closed 1 pt lower ($28.33), Oct unchanged ($28.45) & Dec 1 pt lower ($28.69)

Weekly Soybean Export Inspections – 961.9 K T. vs. 700 k – 1.100 M T. expected

Weekly Soybean Crop Condition & Progress – 55% GE (+2%) vs. 54% expected vs. 66% year ago – Blooming – 94% vs. 99% 5-year average – Setting Pods – 79% vs. 91% 5-year average

Soybeans get a noticeable boost from the ProFarmer data, the slow maturity rates and the announcement that China and the US will resume trade talks. It should be noted that recent rains are indeed aiding soybean pod filling where pods have been set. The wild card will be when the first frost sets in and stops the development. The soybean meal market regained its product leadership with the China/US trade talk resumption as well as slow soybean movement. Party of the idea of the higher price is that more soybeans for export, less soybeans for crushing. Granted this is contingent on the trade talks being successful sooner vs. later.

Interior basis levels for soybeans don’t do a whole lot then again not many cash soybeans are being sold. Soybean spreads showed a bit of a bullish bias due to the slow movement as well as the thought that China/US relationships may improve. The Gulf basis for soybeans is holding in an area we traded late last week. Despite soft looking domestic offers for meal and a stable export market meal spreads showed a steady to fractionally firm bias.

After Friday’s activity the soybean and soybean meal markets were on verge of becoming unglued. I’m not sure today’s rally did anything other than delay the ungluing. Today’s rally in both markets was stopped at first resistance levels. If today’s rally is to keep going we’re going to need more on the China/US trade talks than just talk.  Sure; I understand the late maturity rates but what happens if we get an extended growing season and the US and China cannot get their acts together. The soy complex still has a tremendous amount to prove before I can get on board with the idea of an extended rally.

Daily Support & Resistance for 08/27

Nov Soybeans: $8.57 – $8.75

Dec Soybean Meal: $295.0 (?) – $301.0

Dec Soybean Oil: $28.35 – $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