Soybean Commentary
Jan Soybeans close 2 ¾ cents lower ($10.03 ½), March 2 ¾ cents lower ($10.12 ½) and July 2 ¼ cents lower ($10.27 ¾)
Jan Meal closes $0.9 lower ($314.4),March $0.9 lower ($318.2) and July $1.2 lower ($323.1)
Jan Bean Oil closes 2 pts higher ($35.00), March 1 pt higher ($35.22) and July 3 pts higher ($35.69)
Weekly Export Sales – Soybeans – old crop vs. 800 K – 1.200 M T. expected; new crop vs. none expected – Soybean Meal – old crop vs. 100-300 K T. expected; new crop vs. none expected – Soybean Oil – old crop vs. 5-20 K T. expected; new crop vs. none expected
Bloomberg Survey suggests the US soybean crop is 4.374 billion bu. (+13 million) with a yield of 52.7 bpa (+0.2) – Carryout is suggested at 473 million bu. (-7 million bu.)
On Wednesday the soybean complex (beans, meal and oil) registered interim reversals to the upside. Thursday’s trade registered an inside day of those suggestive interim upside reversals. I could be wrong but I thought I saw some inter-market spreading; buying feed grains selling oilseeds. The bean complex’ trade appears to be a in a short term quandary – conditions in Brazil look great with harvest starting in Mato Grosso (the biggest producing state in Brazil) vs. iffy conditions in Argentina. The Buenos Aries Grain Exchange (BAGE) said today soybean acres will be cut back; 19.3 million hectares vs. original ideas of 19.6 million hectares (741 K acres). Few people are talking about index fund rebalancing and its impact on the soybean complex – why – impact is expected to be minimal.
Interior cash soybean markets are showing a mixed look on Thursday – The Ohio River is easier, Decatur, IN is stronger, Lincoln, NE is easier, Seneca, IL is easier – all other locations run unchanged. The Gulf basis is maintaining its recent strength. Soybean spreads ran steady to easier on the day. Offers to sell cash soybean meal continue to have a depressed look – despite this meal spreads ran slightly better on the day.
Today’s inside day does not negate the suggested interim upside reversals that were registered on Wednesday for the complex – the short term bias remains for higher prices. Tomorrow, Friday, we’ll take our cue from weekly export sales as well as updates on Argentine weather. I can buy into dryness but not too wet. History tells us that “too wet” rallies are more times than not selling opportunities.
Daily Support & Resistance for 01/06
March Beans: $10.04 – $10.25
March Meal; $315.0 – $323.0
March Bn Oil: $34.80 – $35.80
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.