Soybean Commentary
March Soybeans close 3 ¾ cents higher ($10.38), July 3 ¼ cents higher ($10.58 ½) and Nov 1½ cents higher ($10.32)
March Soybean Meal closes $9.3 higher ($386.5), July $7.6 higher ($386.4) and Dec $4.6 lower ($366.4)
March Soybean Oil closes 43 pts lower ($32.19), July 45 pts lower ($32.58) and Dec 47 pts lower ($32.97)
Soybean meal once again resumes its upside leadership role and this time with a vengeance. Soybean crush traders have to be going wild – May soybeans close $175 higher, May soybean meal closes $890 higher and May soybean oil closes $276 lower. The May Board crush is a phenomenal $1.63 a bushel. The answer to all of this is easy – It’s all about the undesirable weather in Argentina. We can’t forget that Argentina is the number one exporter of soybean meal. A distinct shortage there has thoughts of better business being shifted to the US. The hints of minor beneficial weather on Monday (forecasts) were nowhere to be seen on Tuesday.
Interior processor soybean basis quotes read steady to easier given the idea that the new highs are attracting cash movement. Interior river bids are firm – I’m told that some river locations have become “islands in the stream” given the flooding from recent rains. I’m told the more rain is on the way later this week and again early next week. Gulf soybean quotes are grinding higher due to the logistical problems upriver and this is despite a waning US export program. Soybean bull spreads continue to work; fractionally within the crop year and more noticeably vs. the new crop. Interior offers to sell cash meal are soft while the export market for meal is firm. Bull spreads in meal work all the way out to the new crop.
The price action in soybeans appears the bulls remain a bit untrusting of the recent run to new highs. The meal market, which had seen untrusting price action in recent days, put that aside today as prices roared to new highs and new high closes – nothing bearish about this price action. Soybean oil eats like a bird and gags it up like an elephant (what more can I say?)
Daily Support & Resistance for 02/28
May Soybeans: $10.35 – $10.60 (?)
May Soybean Meal; $382.0 – $395.0 (?)
May Soybean Oil: $32.10 – $32.80
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