Jan soybeans close 2 ½ cents lower ($10.29 ¾) March 2 ¼ cents lower ($10.39) and July 3 ¾ cents lower ($10.50 ¼)
Dec Meal closes $5.5 lower ($310.9), Jan $5.6 lower ($312.7) and March $5.5 lower ($315.6)
Dec Bean Oil closes 85 pts higher ($37.64), Jan 86 pts higher ($37.85) and March 87 pts higher ($38.12)
Weekly Export Sales – Soybeans – 1.399 M T. old crop vs. 1.000-1.400 M T. expected; 66.0 K T. new crop vs. none expected – Soybean Meal – 150.4 K T. old crop vs. 120-300 K T. expected; no new crop vs. none expected – Soybean Oil – 54.5 K T. old crop vs. 5-60 K T. expected; no new crop vs. none expected
Bean oil moves into new high ground for the current rally. A stronger energy price along with good demand for bio-diesel says it all. Intermarket spreading against the soybean meal adds to bean oil’s strength. The meal market continues to struggle as it looks for buyers. Between the strength in bean oil and the weakness in bean meal the soybean market gets caught in the middle. Soybean export sales are slowing but continue in the mode of traders’ expectations. As I mentioned earlier the growing conditions in Brazil remain conducive to a large crop. There was a Reuters poll released today suggesting a Brazilian soybean crop of 103.1 M T. Argentina has some iffy areas but it remains early in the season for the Argentinean crop.
The interior soybean basis ran steady to weaker today. Processors appear to be trimming their basis due to the backlog of soybean meal that is developing. The gulf basis showed some noticeable improvement as we move into December. The recent sell-off has shut off producer sales. Soybean spreads showed some minor improvement within the current crop year and against next year. Meal spreads continue to be soft as they reflect the low basis levels.
So – can bean oil continue to keep the soybean market alive or will the soybean meal market drag it lower? Weekly bean oil charts say don’t be surprised if we see 40 cents a lb. Weekly meal charts suggest a challenge of may be in the offing. If we see moves like this in the aforementioned markets soybeans will continue to be caught in the middle. The daily chart for Jan beans suggests we have support at $10.20 – failure at that level would suggest a move down to the mid-high $9.90’s. Resistance for the time being is up towards the $10.50 level.
Jan Beans: $10.20 – $10.46 Jan Meal; $309.0 – $319.0 Jan Bn Oil: $37.20 – $38.50
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