Soybean Commentary
May Soybeans close 13 ¾ cents higher ($9.59), July 14 cents higher ($9.70 ¼) and Nov 11 ¼ cents higher ($9.64 ½)
May Meal closes $2.6 higher ($314.3), July $2.8 higher ($318.6) and Dec $1.9 higher ($318.9)
May Bean Oil closes 44 pts higher ($31.89), July 45 pts higher ($32.16) and Dec 48 pts higher ($32.66)
Weekly Soybean Export Inspections – 521.2 K T. vs. 400-600 K T. expected
Soybean Planting Progress – 10% planted vs. 12% expected vs. 7% last year vs. 7% 5-year average
The soybean complex goes along for the bullish ride on Monday taking its cue from the extreme strength in the feed grain sector. Weekend weather was pretty much a non-event for soybeans (if anything bearish). If corn planting gets delayed beyond its optimum there will be shifts to soybeans. If any wheat is lost in the HRW areas and the SRW areas there’s a good chance it will get planted to soybeans. The bottomline is that old crop stocks are more than sufficient and as of this writing new crop acres will be more than sufficient. Monday was all about short covering – I did not see any new buying.
The interior soybean basis has a mixed look to it (similar to what is happening with the interior corn basis). Where river flooding is an issue bids are lower as there is nowhere to go with it. Where flooding is not an issue the basis is steady to firm as movement is lacking. The bias is the bull spreads to day was from the upfront flat price short covering. The interior meal basis is mixed looking as some areas are better while other easier. The meal export market remains quiet. Once again – the firm meal spreads were about short covering.
The soybean market makes new highs dating back to late March, early April. Sounds impressive don’t it? It’s not as the price action is totaling lacking in character. The meal market appears to be triangulating as the past few weeks are featuring a succession of lower highs and higher lows. A price formation such as this usually breaks out in the direction of the underlying trend (its lower). The bottomline – its too early for weather fears cutting soybean acres. The current weather fears, if they persist, will get you more soybean acres. Another indication that this is a rally in a bear market – bean oil was the strongest of the products on Monday.
Daily Support & Resistance for 05/02
July Beans: $9.60 – $9.75
July Meal; $315.0 – $321.0
July Bn Oil: $31.60 – $32.50
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