July Soybeans closed 10 cents lower ($8.48 ½), August 10 cents lower ($8.53 ½) & Nov 10 ½ cents lower ($8.69 ½)
July Soybean Meal closed $3.3 lower ($329.5), August $3.0 lower ($328.0) & Dec $2.3 lower ($327.6)
July Soybean Oil closed 35 pts lower ($28.77), August 35 pts lower ($28.88) & Dec 35 pts lower ($29.39)
Weekly Soybean Export Inspections – 849.2 K T. vs. 400-800 K T. expected
USDA Monthly Crush Report – 172.4 million bu. crushed in May vs. 173.9 million expected
Weekly Soybean Crop Ratings & Progress – 71% GE (-2%) vs. 72% expected vs. 64% year ago – Blooming – 27% vs. 17% year ago vs. 13% 5-year average
It was another day of poor price action for the soy complex. Soybean came within a few cents of their June 19th low. What made the price performance so poor was that after being down as much as 13 cents prices did trade to slightly higher on the day but then failed to finish only 3 cents off of the earlier in the day low. Action in the product markets was similar especially for soybean meal. Nearby meal contracts are trying to hold their own; the further out one goes the poorer the price action. The primary rationale for the bearishness is the trade tension between China and the US. If the two-sides go forward with their respective tariff enactments on the 6th who knows how low we could go. On the next supply-demand the USDA will incorporate last Friday’s acreage increase. Keeping the yield unchanged at 48.5 bpa production will rise 25-30 million bu. The wild card will be if the tariff enactments go through. The USDA has suggested they might try to incorporate demand loss if the enactments go through.
I’ve got mixed readings with the interior soybean basis. I’ve got one processor in the central Midwest hiking his bid while one out in Nebraska is lowering his bid. Soybean spreads ran pretty flat out to January and then began to lose ground March forward. Bull spreads in meal were trying to work for the first half of the session but failing in the latter half.
The price action is beau coup ugly. Sure, I can tout you minor degrees of short term oversold but that can be alleviated with higher prices in the overnight session. Actually that has been the MO for the price action for the past number of days; higher overnight only to sell-off in the daytime. The trade is looking for a slight decline in crop conditions tonight. To turn the tide we’ll need to a dramatic drop in conditions followed really foul looking forecasts (the west has a hot & dry bias while the east is leaning towards warm and wet).
Daily Support & Resistance for 07/03
Aug Soybeans: $8.45 (?) – $8.68
Nov Soybeans: $8.60 ($?) – $8.82
Aug Soybean Meal; $322.0 (?) – $335.0
Aug Soybean Oil: $28.50 (?) – $29.35
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.