Sept Soybeans closed 1 ½ cents higher ($8.33 ½), Nov 1 ¼ cents higher ($8.45 ¼) & March 1 ½ cents higher ($8.71 ¾)
Sept Soybean Meal closed $1.7 higher ($315.9), Oct $1.6 higher ($316.3) & Dec $1.6 higher ($318.6)
Sept Soybean Oil Closed 9 pts higher ($28.03), Oct 6 pts higher ($28.10) & Dec 9 pts higher ($28.36)
USDA announces 132.0 K T. soybeans sold to unknown
Weekly Soybean Export Inspections – 924.8 K T. vs. 700 K – 1.000 M T. expected
Did recent excessive rains across the gut of the Midwest damage the soybean crop or did these rains enhance the crop? China’s northeast growing areas report frost over the weekend opening the door for speculation that the finishing touches to the crops in that area may have been damaged. One might think it’s not a big deal since we aren’t selling any soybeans to China anyway. Then the question arises on whether or not SA, Brazil in particular, has enough soybeans to satisfy the Chinese demand. Will it come down to China being forced to buy US origin? I don’t think there is any question to the idea the US has a massive crop on its hands. Without better demand lower prices seem almost inevitable. Trade guesses for the USDA report on Wednesday has the US soybean yield increasing by 0.6 of a bushel leading to a carryout increase of 45 million bu. The increase in yield suggests a 55 million bu. increase in production. The difference in 10 million bu. suggests an increase in crush. All in all the US has more soybeans than it knows what to do with. This is one reason why the US government is getting back into the grain storage business. After all it’s their tariffs that caused a good portion of this mess.
The interior soybean basis continues to be rather ugly. Processors have the best basis and even this basis is not that good. Most processors believe that have a “captured” market since export is slack. The latest I saw at the Gulf was a 5 cent under bid with no offers. Soybean spreads saw little change on the day; Nov, Jan and March gain fractionally on May forward. Not much happens with the domestic cash meal offers. The Gulf, however, looks about $3.00 higher. Meal spreads did not do much through January but where noticeably higher vs. March forward. That tells me the trade expects to see good US meal business through Jan, Feb and then expects it to drop off once SA gets online.
Soybean charts have gone sideways against their recent low end. Can the USDA give us anything to get the soybean market off of its can? Since Thursday, August 30th, Dec meal has rallied $15 but has yet to challenge any decent looking resistance. Dec bean oil has been a 125 pt sideways market dating back to early mid-July. I don’t see how the USDA cannot give us bearish data on Wednesday. If the complex does indeed rally on the USDA data on Wednesday it won’t be because its bullish it will be because its not as bearish as the trade was expecting.
Daily Support & Resistance for 09/11
Nov Soybeans: $8.35 – $8.55
Dec Soybean Meal: $313.0 – $323.0
Dec Soybean Oil: $28.00 – $28.90
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