March Soybeans closed 4 ½ cents lower ($8.92 ¾), July 4 ½ cents lower ($9.11) & Nov 5 ½ cents lower ($9.17 ½)
March Soybean Meal closed $0.1 lower ($292.9), July $0.4 lower ($303.1) & Dec $0.9 lower ($308.2)
March Soybean Oil closed 22 pts lower ($30.12), July 24 pts lower ($30.84) & Dec 28 pts lower ($31.57)
USDA suggests planted soybean acres in the US for 2020-21 at 85.0 million
Weekly Soybean Export Sales – Old crop expected at 600 K – 1.200 M T. – new crop expected at none
Weekly Soybean Meal Export Sales – old crop expected at 200-400 K T. – new crop expected at none
Weekly Soybean Oil Export Sales – old crop expected at 15-45 K T. – new crop expected at none
Today the USDA gave us their acreage ideas for the upcoming season. Tomorrow, Friday, they will give us their ideas on demand for the upcoming season. It has already been said they will not try to assess impact from the coronavirus nor will they factor in the potential impact from the Phase One trade deal. They are willing to offer that the coronavirus is responsible for China’s slow start to buying after the Phase One was signed. My response to that is the coronavirus has not stopped China from buying soybeans from Brazil nor has it stopped them from buying wheat from Europe. Remember that all during the Phase One negotiations China said they would base their buying on “market conditions”. The bottom line to all of this is that US goods are too expensive vs. the competition (even without tariffs). Reports out of Brazil suggest their crop is still growing in size despite 25% or so of the crop already harvested. Argentine suggests crop conditions are such that their crop will continue to grow in size if weather stays favorable. I’m told their soybean crop is in the pod-filling stage.
The interior soybean basis shows river bids are improving. The processor basis continues to hold firm despite the recent sell-off in the Board crush margins. Soybean spreads continue to show a firm even though they ran steady on the day within the current crop year. Old crop gains on the new crop as the trade and the producer continue to hold out on the prospect of a start to Chinese buying. Option expiration tomorrow as well as 1st notice later next week is prompting short covering in the spreads. The interior meal basis is maintaining recent strength. The export basis for meal is nothing better than steady. Meal spreads are trying to rally out of their recent hole as the trade continues to hope for a continued meal export program.
The other day it was my thought the recent attempts to rally in the soybean and soybean meal were beginning to struggle. I still have that thought. Soybean oil has a pseudo looking interim double bottom developing. Unfortunately confirmation doesn’t come until March closes over $31.00.
Daily Support & Resistance – 2/21
March Soybeans – $8.85 – $9.00
March Soy Meal – $289.0 – $295.0
March Soy Oil – $29.85 – $30.75
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.