July Soybeans closed 2 ¾ cents higher ($8.81 ¾), August 3 cents higher ($8.88 ¾) & Nov 3 cents higher ($9.09 ¼)
July Soybean Meal closed $0.5 higher ($321.0), August $0.7 higher ($322.7) & Dec $0.9 higher ($330.0)
July Soybean Oil closed 15 pts higher ($27.49), August 15 pts higher ($27.63) & Dec 8 pts higher ($28.15)
Slower than expected soybean planting rates has the soybean complex trading noticeably higher early Monday night. Unfortunately for those with the bullish persuasion prices were unable to sustain that bulge. Some of the rationale for the inability to sustain the rally is that there is still time to get the crop planted and the bigger issue is the lack of demand. It does appear to me that we are not getting any closer to solving our issues with China (probably getting further away) and we still have the threat of Mexican tariffs hanging over our head. I have to think we also saw some technical selling today as last night’s highs represented tests of the highs we saw last week and the inability to follow through.
The interior soybean basis has a similar look to that of the interior corn basis. River locations that are stymied by the high water problems show a steady to weak basis while other locations that can bypass the problem areas are seeing a better basis. Processors continue to show the best basis levels as crush margins are showing some pretty decent profits. The soybean basis at the Gulf eased a bit at midday vs. last night’s posting but overall I have to think the ongoing logistical problems in getting product to the Gulf will keep a firm basis. Soybean spreads had a fractionally softer tone up front and old crop continues to stay wide to the new crop. The meal basis isn’t much different from what I’m seeing with soybeans and corn. The interior is nothing special while the Gulf has a firm tone. Meal spreads continue to be soft especially old crop to new crop.
Soybeans and soybean meal challenge last week’s highs (in some cases took out last week’s highs by marginal amounts) but failed to follow through. Most technicians will view that price action as its time for some downside correction. I cannot disagree. So it comes down to whether we are settling into a consolidation phase at these new higher levels or are we indeed looking at a top? For the time being I’ll favor the idea we have a correction coming at us and I’ll go from there.
Daily Support & Resistance for 06/05
July Soybeans: $8.65 – $8.90
July Soybean Meal: $316.0 ($313.0) – $324.5
July Soybean Oil: $27.00 – $27.90
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