Nov Soybeans closed ¼ cent lower ($8.67 ½), March ¼ cent lower ($8.92) & July ¼ cent lower ($9.18 ¼)
Dec Soybean Meal closed $1.9 lower ($306.1), March $1.3 lower ($310.7) & July $0.2 lower ($316.0)
Dec Soybean Oil closed 18 pts lower ($28.02), March 18 pts lower ($28.51) & July 18 pts lower ($29.10)
Weekly Soybean Export Sales – 388.4 K T. old crop vs. 400-700 K T. expected – 3.0 K T. new crop vs. none expected
Weekly Soybean Meal Export Sales – 255.1 K T. old crop vs. 200-450 K T. expected – 0.9 K T. new crop vs. none expected
Weekly Soybean Oil Export Sales – 22.4 K T. old crop vs. 8-30 K T. expected – no new crop vs. none expected
Highlights of the USDA Soybean Report – US – lowers yield 1.0 bpa leads to a reduction in production 90 million bu. – crush was increased 10 million bu., exports were reduced 160 million bu., seed usage was cut by 7 million bu. – carryout increased 70 million bu. – World – multiple revisions to Chinese soybean production did not have the impact on the World data as it did in the “grain” data – with Chinese data in the mix World carryout increased by 2.04 M T. – take Chinese data out of the mix and the World carryout still increased by 2.96 M T.
With or without China revisions I saw nothing supportive to the USDA soybean data. The complex did sell off from the data but managed to retrace a good portion of the losses. The rally off of the day’s lows is all about the “wishing & hoping” that the US and China will reach some sort of an accord over the ongoing trade rift. I believe there will be some discussions in Washington tomorrow (involving advisors, not decision makers) and then the big meeting between the two leaders at the G-20 Summit on Nov 30th, Dec 1st. Given today’s price action the complex will not break down given the hopes for an accord but given we don’t have an accord yet the upside will remain limited for the time being.
After recent advances in the soybean river basis it turns mixed on Thursday; still some locations increasing the basis while others are easing. Processors are quiet with their basis and rightly so given the recent sharp break in Board crush margins. The Gulf still reads firm with Wednesday night’s posting but this I think is due to light movement and cheap freight. Soybean spreads ran mostly unchanged on the day within the current crop year while losing to the new crop. Offers to sell cash soybean meal continue to look for buyers and given the motion in the meal spreads they are not finding any.
Until we have a better handle on the outcome of the China/US trade talks the soybean complex is going nowhere. We’ll look ugly and not follow through just like we’ll try to look good and not follow through. If you want to trade the sideways watch your shorter term price charts (the inter-day charts) looking for short term extremes to fade for short term trades.
Daily Support & Resistance for 11/09
Jan Soybeans: $8.70 – $8.90
Dec Soybean Meal: $303.0 – $309.5
Dec Soybean Oil: $27.60 – $28.45
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.