Soybeans Commentary

storck

Soybeans – Just My Opinion

Jan Soybeans closed 5 cents higher ($9.20), March 5 cents higher ($9.33 ¼) & July 4 ½ cents higher ($9.57 ¼)

Dec Soybean Meal closed $1.9 higher ($310.8), March $1.9 higher ($316.6) & July $2.2 higher ($323.7)

Dec Soybean Oil closed 9 pts higher ($28.80), March 8 pts higher ($29.29) & July 7 pts higher ($29.84)

Weekly Soybean Export Sales – old crop vs. 700 K – 1.000 M T. expected

Weekly Soybean Meal Export Sales – old crop vs. 225-450 K T. expected – new crop vs. none expected

Weekly Soybean Oil Export Sales – 5-25 K T. expected – new crop vs. none expected

USDA announces 130.6 K T. of soybeans sold to Mexico – 110.0 K T. of soybeans sold to Unknown

Private sources are suggesting China has bought at least 500.0 K T. of US soybeans – other sources suggest its closer to 1.5-2.0 M T.

Presidential tweets Tuesday night and “private sources” rumors push soybeans to new highs for the current rally. The interim high for the months’ old broad trading range is $9.32 ¾ dating back to July 31st. today’s high was $9.28. It was once the “private sources” numbers started to circulate soybean complex prices started to sell off. If all we get is 2.0 M T. it barely puts a dent in the projected carryout. To make a long story short; if we are to see soybean prices continue to move higher we will have to see a lot more than 2.0 M T. of soybeans sold to China. This is just my opinion – the President tweets China is going to be buying tremendous amounts of soybeans and it’s just getting started; does he know what constitutes a tremendous amount of soybeans?

If any changes are being noted with the interior soybean basis it’s easier. Most locations are running unchanged. The Gulf looks easier for immediate needs. Soybean spreads improved fractionally on the day. Offers to sell cash soybean meal, both domestically and for export, remain uninspiring looking. Meal spreads ran fractionally easier on the day. Board crush margins hover just above recent one year lows.

New highs and new high closes for the current move are not bearish. Today’s close is the best Jan beans have seen dating back to early August. So why do I have a pessimistic feeling as I write this? The answer is that the meal market remains a dog. The price action doesn’t look all that bad but it seems it struggles to rally while setbacks come so easy. Top keep the meal rally coming out of its sideways we need to see closes above today’s high. Adding to my pessimism is the idea bean oil is coming into some significant looking resistance levels. Bottom line – the trade has been anticipating soybean purchases from China for the past month and a half – maybe I’m wrong but its my belief the stage has been set for a “buy the rumor/sell the rally.

Daily Support & Resistance for 12/13

Jan Soybeans: $9.05 – $9.32

Jan Soybean Meal: $309.0 – 316.0

Jan Soybean Oil: $28.60 – $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.