August Soybeans expired 11 cents higher ($8.64 ½), Sept closed 11 cents higher ($8.68 ¼) & Nov 11 cents higher ($8.79 ¾)
August Soybean Meal expired $7.2 higher ($335.0), Sept closed $8.3 higher ($335.8) & Dec $9.0 higher ($337.8)
August Soybean Oil expired 15 pts lower ($28.09), Sept closed 8 pts lower ($28.28) & Dec 6 pts lower ($28.61)
It’s all about soybean meal!! Chinese meal prices are moving higher as many in China are anticipating a squeeze due to the lack of US origin. Brazilian meal offers are moving higher. I’m told Argentine meal offers are hard to find. Argentina announces the suspension of its gradual export tariff cuts (soybean meal and soybean oil) for the next 6 months. In addition to all of this US soybean meal export offers are moving higher. The tip-off to this, I think, was Friday’s World projected ending stocks for both meal and bean oil was lower. I’m thinking this was missed by many due to the shocking carryout projections for soybeans. If this anticipated meal demand continues it will work to keep the soybean market alive. Soybean oil will continue to be the weak sister.
Interior river soybean basis levels are moving higher now that the logjam at Alton, IL has been cleared up. Processors still show the best basis levels. Board crush margins have improved by 30 cents of so over the past three days. If this continues I would expect processors start to reach for soybeans. Not much happens at the Gulf. Soybean spreads ran flat upfront while showing a positive note vs. March forward. Offers to sell cash meal are firm for both the domestic market and the export market. Meal spreads upfront lost ground to the December while December forward spreads improve especially against March forward.
So how bullish is soybean meal? Brazil is not known to be a dominant crusher. Argentina doesn’t have the supply of soybeans due to its poor growing season. That leaves the US to be the primary supplier. Daily momentum indicators are trying to turn back higher. On July 31st Dec meal made an interim high at $343.20. If that level is taken out the next technical objective would be closer to $355.0. If we look at the July 31st high of $343.2 to this past Monday’s low of $321.1 that measures to $365.0. If either of these two scenarios come to fruition November soybeans can easily have a $9 in front of them. If the meal market fails to follow through November beans will roll over to challenge the July lows.
Daily Support & Resistance for 08/15
Nov Soybeans: $8.64 – $8.88
Dec Soybean Meal; $333.0 – $341.0
Dec Soybean Oil: $28.15 – $28.90
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