Soybean Commentary
May Soybeans close ¼ cent lower ($9.65 ¼), July 1 cent lower ($9.74 ¼) and Nov 5 ¼ cents lower ($9.64 ¾)
May Meal closes $0.5 lower ($314.1), July $0.2 lower ($318.6) and Dec $1.4 lower ($318.1)
May Bean Oil closes 1 pt higher ($32.33), July 6 pts lower ($32.50) and Dec 13 pts lower ($32.92)
Weekly Export Sales – Soybeans – 318.5 K T. old crop vs. 300-500 K T. expected – 12.8 K T. new crop vs. 100-300 K T. expected – Soybean Meal – 103.5 K T. old crop vs. 50-200 K T. expected – 6.3 K T. new crop vs. 0-50 K T. expected – Soybean Oil – 10.6 K T. old crop vs. 0-22 K T. expected – no new crop vs. 0-10 K T. expected
I’m still somewhat clueless as to what keeps the soybean market alive. I think we saw a fair amount of inter-market spreading; oilseeds vs. feedgrains. I know the SA producer is a reluctant seller – this scenario is more of a short term concern not a long term concern as my experience with tight producer holding may good for basis but it really limits rallies as that grain hangs over the market like a dark cloud. Additionally, we could see a decent sized cut in the old crop carryout on May 10th while the new crop numbers will be scary large – that helps explain the minor boost in the July/Nov spread.
The interior cash soybean market is very similar to the interior cash corn market – where flooding is an issue basis levels are on the defensive while locations that are not being impacted by flooding their basis levels stand in. The gulf appears to be pretty much steady. Bull spreading was quite evident especially old crop vs. new crop.
The old crop soybean picture hangs in with its sideways to higher bias. We’re not setting the world on fire with this price action as it is more of a grinding motion. The price action of the last month or so resembles an upflag when channel lines are implemented. $9.80 (July) represents the first level of minor congestive type resistance. $9.70 (Nov) represents the first level of minor resistance. Price action in the meal market still suggests a triangulating price motion (lower highs vs. higher lows). This type of price action usually (not always) breaks out in the direction of the underlying trend which in this case is lower. Bean oil gave us an interim breakout to the upside earlier this week but struggles to sustain rallies.
Daily Support & Resistance for 05/05
July Beans: $9.65 – $9.80
July Meal; $315.0 – $322.0
July Bn Oil: $32.00 – $33.00
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.