March Soybeans closed 1¼ cents higher ($8.94 ½), July 1 cent higher ($9.18 ¾) & Nov unchanged ($9.37 ½)
March Soybean Meal closed $0.8 higher ($310.1), July $0.7 higher ($317.6) & Dec $0.8 higher ($322.9)
March Soybean Oil closed 1 pt lower ($28.23), July 2 pts lower ($28.79) & Dec 5 pts lower ($29.37)
The soy complex tries to rally early on ideas that Tuesday’s break was technically overdone. Highs of the day came relatively early while the balance of the day was spent retracing that early rally. Prices did see some minor short covering late that brought meal and bean prices back to the plus side while bean oil prices came back to 1 or 2 ticks lower on the day. Another prominent Brazilian consulting agency came with their latest ideas on Brazilian soybean crop size; 117.2 M T. This estimate is not out of line with recent ideas. Overall new news remains scant as export demand is slight at best and the Chinese/US trade problems remain unresolved. As we move closer to the end of the month when the two sides are scheduled to meet I would expect to see volatility improve from the current 13.7. Between now and then I don’t see the market completely breaking down nor any substantial rally. The trading range atmosphere of late should persist.
The interior cash soybean markets (basis) remain quiet while depressed looking. The recent bulge in the basis at the Gulf has eroded away. Soybean spreads saw some minor improvement on the day but not enough to sway the recent bias of widening spreads. Offers to sell cash soybean meal, both for export and for domestic use, continue to be depressed looking. Soybean meal spreads ran mostly flat on the day.
The technical look has soybeans taking a pause at their 100-day MA. As I mentioned yesterday we have some interim trendline support sitting just below the $8.90 level (March). Today’s technical trade reflects trader hesitancy to press the market in the current interim hole. That doesn’t make them bullish; just cautious. I see a similar situation in the soybean meal market; hesitancy to press the low side of the months old trading range. As in soybeans it doesn’t make the market bullish. Soybean oil has a bit of a downflagging appearance off of last week’s interim high. Direct fundamental news for bean oil continues to have a friendly bias but not enough of one for the market to go it alone on the upside. As far as I’m concerned the best approach to the soy complex between now and month end it to fade short term interim extremes for short term trading opportunities.
Daily Support & Resistance for 01/17
Mch Soybeans: $8.87 – $9.07
Mch Soybean Meal: $308.0 – 314.0
Mch Soybean Oil: $27.95 – $28.60
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