Soybean Commentary
May Soybeans closed 16 cents higher ($10.31 ¼), July 15 ½ cents higher ($10.42) and Nov 15 cents higher ($10.34)
May Soybean Meal closed $1.8 higher ($383.6), July $2.1 higher ($387.0) and Dec $0.4 lower ($371.7)
May Soybean Oil closed 10 pts higher ($31.78), July 9 pts higher ($32.05) and Dec 10 pts higher ($32.75)
Weekly Soybean Export Sales – 1.133 M T. old crop vs. 600-900 K T. expected – 358.2 K T. new crop vs. 0-150 K T. expected
Weekly Soybean Meal Export Sales – 414.3 K T. old crop vs. 150-300 K T. expected – no new crop vs. none expected
Weekly Soybean Oil Export Sales – 43.5 K T. old crop vs. 10-35 K T. expected – no new crop vs. none expected
Buenos Aires Grains Exchange says Argentina’s soybean harvest is now 38.0 M T. vs. their previous of 39.5 M T. vs. the USDA last month at 47.0 M T.
Once again it looks like the trading in the Crush spreads is dictating the flat price movement within the complex. On Wednesday we saw sharply lower soybeans yet higher meal and the Board crush margins screamed higher. Today we saw the soybean market leading the way higher while the meal market somewhat languished. On Wednesday the Board crush was up 20 cents, today it was down 10 cents.
So what is this all about? Given the short fall in the Argentine soybean and Argentina is the leading product exporter the idea is more meal business will come the way of the US. What happens if China does indeed impose import duties on US soybeans? They are still open to buy soybean meal from us. The bottomline; there is excellent potential for the US to have some great product export business as we move forward.
The interior cash soybean market is literally all over the place. I’ve got some processors standing in, I’ve got some processors showing some defense. River locations that feed to the Gulf are noticeably stronger. The Gulf is stronger as well. Bull spreads were working within the current crop year as were bull spreads in the new crop. The interior meal basis does not look like anything special and neither does the export market but bull spreads work noticeably in the meal futures’ market.
Now that the trade realizes that possible Chinese import tariffs won’t be enacted any time soon (if at all) the soybean bulls bought back what they puked out yesterday. The “however” is that we have a fair amount of technical resistance still hanging over the market. Current inter-day charts suggest July beans could have a tough time starting at the $10.50 level. Nov beans are looking at similar resistance starting in the mid-low $10.40’s. July meal is a much stronger looking chart. Get July meal through the $390-$392 level and the next stop will be the $400 mark. Bean oil holds at suspected support levels but that’s about it. For as slack as bean oil looks I really don’t want to be short at current levels. I just can’t make up my mind if I want to buy it.
Daily Support & Resistance for 04/06
July Soybeans: $10.30 – $10.55
July Soybean Meal; $380.0 – $392.0
July Soybean Oil: $31.60 – $32.50
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.