March Soybeans closed 2 ¼ cents higher ($8.84 ¼), July 2 ¼ cents higher ($9.10 ¼) & Nov ¾ cent higher ($9.19 ¼)
March Soybean Meal closed $2.1 higher ($291.4), July $1.7 higher ($302.2) & Dec $1.5 higher ($308.9)
March Soybean Oil closed 35 pts lower ($30.62), July 33 pts lower ($31.37) & Dec 28 pts lower ($31.98)
Weekly Soybean Export Inspections – 603.8 K T. vs. 700 k – 1.350 M T. expected
Results of Reuters Poll for February 11th USDA Supply Demand – US soybean carryout 443 million bu. vs. 475 in January – World soybean carryout 96.90 M T. vs. 96.67 in January – Brazilian soybean production 123.65 M T. vs. 123.00 in January – Argentine soybean production 53.15 M T. vs. 53.00 in January
Is the tide changing here as soybean meal market has been complex upside leader two days in a row? For what it is worth I think the meal market is responding to additional threats by the Argentine producer to hold new labor strikes and or hold off on any new grain sales if their government doesn’t roll back export duties. Over the weekend the veg oil markets saw a bullishly construed palm oil report (at least on paper) but it was overshadowed by possible implications from the spreading coronavirus in China (losing their demand). With the meal market being modestly higher and bean oil market modestly lower the soybean market continues to get caught in the middle. Last week I talked about Feb 15th being the effective date to the Phase One trade deal to kick in. Does anyone think that may bring us some new Chinese buying? Given that China said all during the negotiations that they would buy based on market conditions I highly doubt it unless China begins to issue tariff free import licenses. Even if that were to occur I’m not sure US origin would be cheaper. Harvest appears to be rolling long in Brazil and the Brazilian producer appears to be a continuing active seller.
Other than the Ohio River soybean basis continuing to inch higher all other interior soybean basis locations ran unchanged. The Gulf maintains Friday’s slight bump higher at its midday posting. Soybean spreads ran steady within the current crop year while gaining on the new crop. I’m not seeing any notable changes with the interior soybean meal basis. The export basis for meal has taken on a slightly easier tone. Meal spreads for the 2nd day in a row saw minor improvements.
Soybean meal registered a minor buy signal late last week (Thursday) and has managed some follow through buying. How much of this is related to the Argentine producer threats or just plain old short covering remains to be seen. For what it is worth the spec is a fair sized short in soybean meal. Today’s high in March meal barely tapped at the minor resistance that was set up 2-3 weeks ago and then sold off. If soybean oil is going to be any good I have think the $30.50-$30.25 level (March) will hold. March soybeans tapped at minor resistance today, $8.90, and could not muster any follow through. I’m not sure tomorrow’s Supply-Demand report will offer much help as I see a slightly lower US carryout but the possibility of a higher World carryout due to larger SA production data. I have no axe to grind in either direction for soybeans at this time.
Daily Support & Resistance – 2/11
March Soybeans – $8.75 – $8.95
March Soy Meal – $288.0 – $296.0
March Soy Oil – $30.25 – $31.25
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