Soybean Commentary
May Soybeans close 6 cents lower ($10.19 ½), July 6 ¼ cents lower ($10.30 ¼) and Nov 5 cents lower ($10.20 ½)
May Soybean Meal closes $2.6 lower ($372.4), July $2.7 lower ($375.1) and Dec $3.5 lower ($362.3)
May Soybean Oil closes 12 pts higher ($31.58), July 13 pts higher ($31.85) and Dec 16 pts higher ($32.51)
What started out as a slow two-sided trading day Soybeans and soybean meal eventually sagged on Tuesday as the Brazilian consulting agency, Agroconsult, suggested the Brazilian soybean crop is 118.9 M T. If true this would go far in offsetting the lower Argentine crop. Last month the USDA suggested the Brazilian soybean crop was 113.0 M T. Last week BAGE suggested the Argentine soybean crop was 39.5 M T. vs. the USDA at 47.0 M T. (last month). If the USDA were to take everyone’s numbers at face value it would suggest next month’s SA production would be down just another 1.6 M T. If we couple this with a bearish looking USDA Quarterly Stocks and Prospective Planting number I would have to question the need to rally further over the near term.
Most interior cash soybean basis locations are running steady; if not steady they’re a bit better. Cash soybean sales have slowed down considerably in recent days. I think most producers that have soybeans to sell are willing to wait to see what the USDA has to say. The Gulf is stable for soybeans. Soybean spreads had a fractional bullish bias within the old crop while old crop loses to the new crop. I don’t see any changes in the offers to sell cash soybean meal – they continue to look for buyers. Meal spreads ran fractionally mixed within the current crop year while old crop continues to gain on the new crop.
Tuesday’s close in soybeans suggests we may visit last Friday’s low in the near term. Today’s close in soybean meal suggests we will probe the suspected support level, $370.0 July, over the near term. All bean oil is seeing is some left-handed support – not the best in my book. As much as I would like to believe the US has some excellent crush potential due to the Argentine shortfall a bearish looking Stocks report will suggest we have the beans to meet that potentially new demand.
Daily Support & Resistance for 03/28
July Soybeans: $10.20 – $10.40
July Soybean Meal; $369.0 – $380.0
July Soybean Oil: $31.50 (?) – $32.20
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