Soybean Commentary
July Soybeans close 31 cents lower ($9.44 ¾), Aug 28 ¼ cents lower ($9.46 ¾) and Nov 23 cents lower ($9.44 ¾)
July Meal closes $7.8 lower ($307.5), Aug $7.7 lower ($308.4) and Dec $6.6 lower ($310.1)
July Bean Oil closes 71 pts lower ($32.44), Aug 72 pts lower ($32.53) and Dec 67 pts lower ($32.89)
Weekly Export Sales – Soybeans – 355.3 K T. old crop vs. 200-400 K T. expected; 41.5 K T. new crop vs. 0-200 K T. expected – Soybean Meal – 113.5 K T. old crop vs. 50-150 K T. expected; 60.3 K T. new crop vs. 0-100 K T. expected – Soybean Oil – 14.9 K T. old crop vs. 0-20 K T. expected; 0.6 K T. new crop vs. 0-12 K T. expected
The soybean complex collapses overnight and followed through to the downside during Thursday’s trade. Allegations of corruption aimed at the new Brazilian president has the Brazilian Real collapsing leading traders to think that Brazilian producer selling of their new crop soybeans will start to increase. In recent weeks the strength of the Real has had Brazilian producers’ reluctant sellers – this ideology is now changing. The end result has July beans challenging its April low at $9.41 which coincides with last August’s low. July meal is now at levels not seen since last October. July bean oil is challenging its immediate uptrend line that has been in place since mid-April.
The interior soybean basis has a mixed look to it while the Gulf is noticeably lower. I guess the participants at the Gulf are believing that Brazilian producer selling will pick up and it will put a dent in recent US export demand. Needless to say spreads were softer throughout the complex. Is there a need to tell you that the meal basis continues to be a dog?
The 1 ½ month old upflagging effort in soybeans finally broke down today. The break down in the flag measures to the low $8.90’s basis the July contract and a challenge of $9.00 basis the Nov.
July meal breaks down out of its 1 ½ month old sideways motion – it now measures to $295.0. If July bean oil takes out its current support line there is no reason why it can’t trade down to the $31.00 level. Now all of these price projections appear to be rather severe. If soybean meal only breaks another $10.0 to $15.0 I find it highly doubtful that soybeans break another 50 cents. If the possible weather problems for corn planting come to fruition that will mean more soybean acres so in that regard the magnitude of the measurements are possible. As of this writing it looks like being short oilseeds/long feed grains does indeed have some long term potential. Tomorrow’s Friday and most inter-day technical indicators read rather oversold – don’t be surprised to see an attempt at some consolidation/minor retracement of Thursday’s break.
Daily Support & Resistance for 05/19
July Beans: $9.40 (?) – $9.54
July Meal; $305.0 ($301.0) – $311.0
July Bn Oil: $31.90 – $32.80
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.