Soybean Commentary
March Soybeans close 26 ½ cents lower ($10.22 ¾), July 25 cents lower ($10.40 ½) and Nov 21 ¼ cents lower ($10.04)
March Meal closes $8.6 lower ($334.4), July $8.6 lower ($339.5) and Dec $6.5 lower ($329.6)
March Bean Oil closes 66 pts lower ($33.61), July 64 pts lower ($34.16) and Dec 57 pts lower ($34.09)
Weekly Soybean Export Inspections – 1.630 M T. vs. 900 K – 1.200 M T. expected
Benign looking forecasts for SA go far in offsetting better than expected weekly soybean export inspections. Not only was SA weather/forecasts responsible Monday’s sharp sell-off but so was the CFTC COT report on Friday showing the spec sector is the longest they have been in beans and meal dating back to last summer. The end result was broad scale liquidation throughout the soy complex.
Of the 9 interior soybean basis locations that I track 3 locations reported better basis bids; the 3 were river locations. Processors and elevators reported unchanged basis bids. The Gulf basis was a bit better but in line with where it had been trading last week. Soybean bids continue to show a widening bias. The March/May soybean spread trades out to new contract lows. On Jan 12th the July/Nov spread saw a low of 30 cents over – 3 days later it trades at 65 cents over – today’s low was 35 ½ cents over. Offers to sell cash soybean meal continue to stay depressed. Crush margins are such that the processor continues to grind locking in profits along the way.
In mid-January the trade was falling all over themselves to own beans and meal due to Argentine weather worries. Now that those worries have been moved to the back burner they can’t get out fast enough. Late last week the soybean market was leaking lower while the meal market was trying to stand in. The meal market gave way today and the soybean market just got sick all over itself. $10.15 – $10.10 starts a near 20 cent band of support for March beans. March meal may try and find support at $330 as that level represents some previous highs. Below that we look at a smattering of support at $326 and then nothing until the mid-high $310.0’s. I’m not sure where bean oil will try and catch hold as its last rally followed by failure measure to $32.00 (March). The bottomline for now – without weather worries from SA the rationale for ownership has flown out the window.
Daily Support & Resistance for 01/31
March Beans: $10.15 – $10.35
March Meal; $331.0 ($328.0) – $339.0
March Bn Oil: $33.00 – $34.00
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