Nov Soybeans closed 7 cents lower ($8.23 ½), March 6 ¾ cents lower ($8.50 ½) & July 6 ¼ cents lower ($8.74)
Oct Soybean Meal closed $2.8 lower ($302.9), Dec $3.0 lower ($305.7) & March $2.1 lower ($306.3)
Oct Soybean Oil closed 6 pts lower ($27.43), Dec 6 pts lower ($27.70) & March 6 pts lower ($28.29)
USDA announces 241.0 K T. of soybeans sold to unknown
Weekly Soybean Export Inspections – 784.7 K T. vs. 700 K – 1.000 M T. expected
NOPA August Crush – 158.885 million bu. vs. 163.870 million bu. expected – Soybean Oil Stocks – 1.623 billion lbs. vs. 1.762 billion lbs. expected
Weekly Soybean Crop Condition % Progress – 67% GE (-1%) vs. 68% expected vs. 59% year ago – Dropping Leaves – 53% vs. 36% 5-year average – Harvested – 6% vs. 5% expected vs. 3% 5-year average
The anticipation of harvest as well as politics in the market place had the soybean market grinding down to last Wednesday’s contract low. Unlike last Wednesday when the low was made new contract low closes were registered today. The “politics” in the market place is the trade dispute between China and the US. As of this writing I’ve yet to see the threatened $200 billion in tariffs enacted. Over the weekend I did see the threatened tariffs come down to 10% vs. the previously announced 25%. The other side of that coin is China suggesting they may not take up the US on last week’s invitation to meet. Soybean meal was the downside leader of the products. Board crush margins appear to be clearly on the defensive. The bottom line to all of this is we have too many soybeans and we are clearly missing the demand from China. As long as China and the US are pissing on one another the soybean complex will stay on the defensive.
The cash soybean market (basis) is like the futures’ market; ugly. This holds true for both domestic and export. Soybean spreads continue to go the route of the flat price; lower/wider. Offers to sell cash soybean meal are not much better than the cash prices of soybeans. Meal spreads, too, go the route of the flat price. So far the soybean complex remains the perfect bear storm; lower basis, lower spreads and a lower flat price.
I see one of two ways to turn the soybean around – severe harvest delays with yield loss and/or coming to terms with China.
Daily Support & Resistance for 09/18
Nov Soybeans: $8.10 (?) – $8.36
Dec Soybean Meal: $303.0 – $310.0
Dec Soybean Oil: $27.50 (?) – $28.10
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.