August Soybeans closed 10 ¼ cents higher ($8.58), Sept 10 cents higher ($8.63 ½) & Nov 10 ½ cents higher ($8.71 ½)
August Soybean Meal closed $0.9 higher ($328.9), Sept $1.1 higher ($328.0) & Dec $1.3 higher ($326.7)
August Soybean Oil closed 27 pts higher ($28.24), Sept 27 pts higher ($28.34) & Dec 26 pts higher ($28.58)
The soybean complex was easier in the overnight and into the early part of the day session stemming from the better than expected crop condition report. Shortly thereafter it became known that the “Administration” was going to announce a $12 billion aid package to the US farmer that had been impacted by the ongoing trade disputes. With that soybean prices firmed rather quickly registering new highs for the current rally. Here are the line items said by the USDA later in the session
- PACKAGE INCLUDES DIRECT PAYMENT PROGRAM, FOOD PURCHASE PROGRAM, TRADE PROMOTION PROGRAM
- SAYS PROGRAMS ALREADY AUTHORIZED UNDER COMMODITY CREDIT CORP ACT, DOES NOT REQUIRE CONGRESSIONAL APPROVAL
- AID PACKAGE IS SHORT-TERM SOLUTION
- AID PACKAGE WILL KICK IN AROUND LABOR DAY
- THIS A ONE-TIME PROGRAM
There are a lot of unknowns with these statements. When the program is schedule to kick around Labor Day where will the price of soybeans be? At what price level will the government be willing to pay? I have no clue as to what a “Trade Promotion Program” is other than subsidizing sales. The last time the government got into the grain business the only parties to make money was the elevator owner receiving storage payments from the government.
The Ohio River jumps its soybean bid by 5 cents. All other locations that I track ran unchanged on the day. Processors still show the best bids out there. Today’s rally in soybeans had Board crush margins easing by another 4 ½ to 5 ½ cents. The August Board crush is down about 30 cents over the past 7 days. The November Board crush is down a similar amount. Soybean spreads had a fractional bearish bias on the day. Soybean meal spreads saw a similar performance.
Personally I don’t know how to play politics in the marketplace. Price action, however, doesn’t know any of that. The next decent looking resistance level for November beans is in the mid-$8.80’s. Based on what we did today support is the mid high $8.50’s. The sideways action continues for the meal market as does the recent upflagging action in the bean oil market.
Daily Support & Resistance for 07/25
Aug Soybeans: $8.48 – $8.70
Nov Soybeans: $8.63 – $8.85
Aug Soybean Meal; $325.0 – $334.0
Aug Soybean Oil: $27.90 – $28.40
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.