Soybeans Commentary

storck

Soybeans – Just My Opinion

August Soybeans closed 3 ¾ cents higher ($8.46), Sept 4 cents higher ($8.52) & Nov 3 ¾ cents higher ($8.61 ½)

August Soybean Meal closed $0.6 higher ($328.8), Sept $0.4 higher ($327.4) & Dec $0.5 higher ($326.1)

August Soybean Oil closed 24 pts lower ($27.83), Sept 24 pts lower ($27.93) & Dec 26 pts lower ($28.21)

Weekly Soybean Export Sales – 252.3 K T. old crop vs. 200-500 K T. expected – 613.4 K T. new crop vs. 100-500 K T. expected

Weekly Soybean Meal Export Sales – 131.0 K T. old crop vs. 50-200 K T. expected – 91.0 K T. new crop vs. 25-150 K T. expected

Weekly Soybean Oil Export Sales – 10.9 K T. old crop vs. 8-30 K t. expected – 9.2 K T. new crop vs. 0-10 K T. expected

The complex was soft all day until the latter part of the session. When it became apparent that the meal market was not going to break down short covering surfaced bringing both meal and beans to the plus side. Gains weren’t great but from a technical perspective I thought it was a very positive day. Weekly export sales for new crop soybeans came in better than expected.  Weekly export shipments of soybean meal were a marketing year high. The latest forecasts from the NWS for the month of August talks about above normal temps and below normal moisture. In the short term we have a rain event coming at us as we speak followed by below normal temps with a dry bias. If we do finish the month of July with a dry bias and August starts out warm and dry we just may get a soybean market after all; tariffs or no tariffs.

The most notable change in the interior soybean basis is Toledo jumping their bid 9 cents (I hope it wasn’t a typo).  Overall the river bids remain slack while processors stand in. Board crush margins continue to correct. Soybean spreads ran steady to fractionally firmer. The interior meal basis runs mostly steady with only one improvement (I believe it was Mankato). The export market for meal continues to have a firm look. Meal spreads ran mixed upfront while Jan forward had a bearish look.

Soybean meal continues to stand in and that allows the soybean market to realize minor support when it tries to sell off. As long as the meal market stands in it will be tough to sustain a sell-off in soybeans.  I thought the soybean market gave us a great technical performance today as we were soft for the majority of day only to finish a bit better.  I’m thinking tariff talk has been put on the back burner for the near term and focus is moving to crop developing weather. Consolidation may be our worst case scenario for the near term.

Daily Support & Resistance for 07/20

Aug Soybeans: $8.40 – $8.56

Nov Soybeans: $8.56 – $8.72

Aug Soybean Meal; $327.0 – $334.0

Aug Soybean Oil: $27.65 – $28.25

 

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.