November Soybeans closed 2 ½ cents lower ($9.18 ¼), March 1 ½ cents lower ($9.46 ¼) & July ¾ cent lower ($9.68 ¼)
December Soybean Meal closed $1.0 lower ($303.0), March $0.9 lower ($309.3) & July $0.9 lower ($317.0)
December Soybean Oil closed 22 pts higher ($31.00), March 23 pts higher ($31.48) & July 20 pts higher ($32.02)
The rhetoric behind the US/China trade negotiations continues to go back and forth. One side says we’re getting close while the other side says maybe not. It does appear that both sides are still looking at a signing date in mid-November for Phase One. This kind of talk keeps the soybean market on the defensive as does the lack of announced Chinese soybean buying. Soybean oil resumed its leadership role within the two product markets getting support from continued rising palm oil prices. Soybean meal continues to be a trading range affair but remains biased to the projected low side of the trading range.
If the interior soybean basis is not higher it is no worse than steady. All locations that I track do show a definite higher trend. This holds true for soybean Gulf values. Similar to corn cash soybean movement remains limited to the point that whatever your interest is (processing of export) you have to pay up for your origination. Despite all this strength in the basis soybean spreads continue to be on the defensive. A good portion of the bear spreading comes out of the November contract as the delivery period starts on Thursday. The Nov/Jan spread traded out to a 15 ½ cent carry which is a new low with a new low close. Most soybean spreads within the current crop year are showing a bearish bias and now the year-to-year spreads are now showing evidence of breaking down. Offers to sell cash meal in the interior continue to show almost dramatic looking “unders”. Not much happens with the Gulf offers. Going forward the trade will be watching the political goings on in Argentina for signs that an export tax will be enacted. If that occurs sooner vs. later I have to think that not only will spreads get a boost but flat price as well.
The price action in soybeans continues to advertise liquidation. Early in the day the soybean trade tried to reject the lower night time prices with a 9 cent rally only to spend the rest of the coming back down to those levels; not a very good technical performance as the flat price stopped at Monday’s high. I don’t have a positive attitude to the meal market as it continues to favor the low side of it suggested trading range. Soybean oil can rally all it wants but without the meal market asserting itself the soybean market will no better than stay alive.
Daily Support & Resistance for 10/30
Jan Soybeans: $9.28 – $9.40
Dec Soybean Meal: $300.5 – $307.5
Dec Soybean Oil: $30.50 – $31.40
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.