July Soybeans closed 5 ½ cents lower ($9.03 ½), August 6 cents lower ($9.08 ¾) & Nov 6 ¼ cents lower ($9.26 ½)
July Soybean Meal closed $1.9 lower ($315.7), August $1.9 lower ($317.0) & Dec $2.4 lower ($323.7)
July Soybean Oil closed 35 pts lower ($28.00, August 34 pts lower ($28.14) & Dec 37 pts lower ($28.59)
Crop conditions come in lower than expected – the rate of planting comes in lower than expected – the lack of emergence is almost glaring. Despite all of this the soybean complex failed to hold the ensuing rally. This suggests to me that the trade is with the belief that soybean planting is still happening. Given trade estimates of the USDA planted acreage reports no one is really sure that the USDA has a handle on soybean acreage; at least not yet. Quarterly Stocks (old crop) are expected to be at all-time highs for the current reporting period. For what it is worth current forecasts for the near term are conducive to better plant growth.
The Gulf basis for soybeans did not react as sharply as the Gulf corn basis did when it was announced St. Louis was closing once again. This I believe highlights that fact of our poor demand. Basis levels elsewhere continue to show a firm bias due to slow producer selling. Bull spreads in soybeans were working all the way out to July 2020. Soybean meal spreads saw similar bull spreading but to a lesser extent.
Soybeans are in a minor consolidation mode sitting just under last week’s highs. This holds true for both old crop and new crop. It is my thought the longer we sit here the greater potential for lower prices. When a market fails to respond to favorable news something is amiss. It would suggest too many spec longs for the time being.
Daily Support & Resistance for 06/26
Aug Soybeans: $9.00 – $9.18
Nov Soybeans: $9.17 – $9.35
Aug Soybean Meal: $311.0 – $320.0
August Soybean Oil: $27.85 – $28.40
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.