January Soybeans closed 1 ¼ cents higher ($9.37 ¾), March 1 ¾ cents higher ($9.46 ½) & July 1 cent higher ($9.70 ¼)
January Soybean Meal closed $2.3 lower ($299.5), March $2.1 lower ($304.0) & July $1.7 lower ($310.8)
January Soybean Oil closed 50 pts higher ($34.38), March 51 pts higher ($34.67) & July 51 pts higher ($35.25)
Weekly Soybean Export Sales – old crop vs. 700 K – 1.500 M T. expected – new crop vs. 0-50 K T. expected
Weekly Soybean Meal Export Sales – old crop vs. 100-300 K T. expected – new crop vs. none expected
Weekly Soybean Oil Export Sales – old crop vs. 5-30 K T. expected – New crop vs. none expected
Soybean oil continues to be the leader of the soybean complex. Palm oil continues to be the primary influence as it nears a 3-year high from fears of yet lower production. The soybean meal market languishes due to the inter-market spreading involving long soybean oil vs. short soybean meal. The end result for soybeans was a quietly higher day with just a 4-cent range. The only positive I’m seeing for soybeans is that the market did post a new high and close for the current rally. The weather in SA continues to be conducive to a large crop. Tomorrow is export sales day and the trade will be looking for additional evidence of Chinese buying beyond the two cargoes (126.0 K T.) that were announced on the 19th.
All of the interior soybean basis locations that I track run unchanged on the day. The Gulf’s midday posting appears to be a shade easier. The nearby soybean spread ran a shade easier due to 1st Notice day occurring next Tuesday. It appears that the July contract was on the short end of most spreads whether it involved the old crop or the new crop. Offers to sell cash soybean meal run unchanged whether it’s in the interior or for export. Soybean meal spreads showed a bearish bias all the way out to the new crop.
After a brief stint of consolidation just below recent highs soybean oil was a “gap & go”. Today’s low was above the previous high for the current rally. I think the soybean oil market is beginning to flirt with overbought but the price action does not suggest the party is over. Soybean meal continues to be a weight around the soybean market’s neck but the strength in soybean oil keeps the soybean market alive. I would like to think the meal market is no worse than a trading range affair given the political mess that is happening in Argentina. If that mess continues (export duties hampering exports) I have to think the eventual outcome for US soybean meal is higher prices. Short covering in soybeans in anticipation of better Chinese business continues to be the best support for soybeans. The technical look suggests soybeans are just starting to flirt with overbought. So far March soybeans have done a decent job of grinding through the suspected resistance from $9.40 to $9.50. The next level of resistance begins at the $9.60 level. If that level is to be eclipsed continued solid exports will need to be seen.
Daily Support & Resistance for Dec 27th
March Soybeans: $9.35 – $9.52
March Soybean Meal: $301.0 – $307.0
March Soybean Oil: $34.20 – $35.00
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