July Soybeans closed 22 ½ cents lower ($8.29 ¾), August 22 ¾ cents lower ($8.33) & Nov 23 ¼ cents lower ($8.48 ¼)
July Soybean Meal closed $1.4 lower ($333.0), August $1.7 lower ($330.5) & Dec $2.6 lower ($327.7)
July Soybean Oil closed 55 pts lower ($28.33), August 56 pts lower ($28.43) & Dec 60 pts lower ($28.82)
The US proposes more tariffs against the Chinese and that prompts another round of new contract lows with new contract low closes for the soybean market. Adding to the bearish rationale is the idea of big supply numbers with lower demand from the USDA tomorrow. Production will rise due to the increase of harvested acres reported by the USDA last month. The USDA has said they will try to incorporate the effects of the Chinese tariffs which would suggest lower exports. I think the USDA will increase the rate of crush given the current new crop crush margins that have ratcheting higher. I don’t think an increase in crush will be enough to offset lower exports.
Not much is happening with the interior soybean basis. Processors continue to show the best bids but they are not reaching for origination despite the zooming higher crush margins. The Gulf looks mostly steady. Soybean spreads were mostly steady on the day. Offers to sell cash meal continue to show a firm bias; both for domestic usage and export. Meal spreads continue to show a firming bias. I would hate think where soybean prices would be if we did not have a meal market that is standing in.
Similar to my corn ideas I’d like to think that from a time frame were not far from making lows in the soybean market. From a price standpoint I’m looking at something closer to the $8.10 level (November). This level is calculated from the most two recent attempts to correct. The bottom line is that the trade is pretty beared up for some negative numbers. What do we do for an encore?
Daily Support & Resistance for 07/12
Aug Soybeans: $7.95 – $8.55
Nov Soybeans: $8.10 – $8.70
Aug Soybean Meal; $320.0 – $339.0
Aug Soybean Oil: $27.90 – $29.20
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.