July Soybeans closed ¼ cent higher ($8.30), August ¾ cent higher ($8.33 ¾) & Nov 1 cent higher ($8.49 ¼)
July Soybean Meal closed $0.4 higher ($333.4), August $0.4 lower ($330.9) & Dec unchanged ($327.7)
July Soybean Oil closed 16 pts lower ($28.17), August 16 pts lower ($28.27) & Dec 13 pts lower ($28.69)
Highlights of the USDA Supply-Demand Soybean Report – US Old Crop – increased total usage by 38 million bu. – lowered carryout by 40 million bu. – US New Crop – lowered carryin by 40 million bu. – increased production by 30 million bu. – increased crush by 45 million bu. – lowered exports by 250 million bu. – increased carryout by 195 million bu. – World Old Crop – lowered carryin by 710 K T. – lowered total usage by 3.05 M T. – increased carryout 3.53 M T. – World New Crop – increased carryin 3.53 M T. – increased production 4.25 M T. – lowered total usage by 3.41 M T. – increased carryout 10.25 M T.
The old crop soybean data came in bullish but then again no one is focusing on old crop. The new crop data came in more bearish vs. what the trade was expecting. The big hit was the Chinese import reduction, 8.0 M T. After an initial herky-jerky reaction (tried to rally, then broke) it appeared the soybean market ran out of sellers and prices moved to the plus side. It wasn’t a monumental rally but a much better than expected performance given the numbers. It has to be noted that the meal market refuses to break down and in the long run that’s not bearish.
Processors still show the best bids for beans despite them not reaching. Board crush margins eased ever so slightly; still extremely strong. The only change I saw in the river basis was Seneca, IL down 6 cents. Is this the processor’s way of diverting soybeans away from the river and back to them? The Gulf market for soybeans continues to be what I call a non-event. Sept forward soybean spreads saw steady to fractional improvement. Offers to sell cash meal in the interior are quiet while bids for export meal continue to strengthen. Meal spreads continue to show a bias for improvement.
So if my assessment of the soybean market is correct in that they ran out of sellers where do we go from here? Soybeans did register an ever so slight reversal to the upside; new contract lows with a fractional higher close. I’ll grant you the supply-demand numbers are large but given today’s market action I get the impression the market needs to rally from here if you want it to go lower. There was an article on Bloomberg late in the session suggesting both China and the US are willing to talk about the tariffs but no date has been reported.
Daily Support & Resistance for 07/13
Aug Soybeans: $8.27 – $8.47
Nov Soybeans: $8.42 – $8.62
Aug Soybean Meal; $328.0 – $336.0
Aug Soybean Oil: $27.90 – $28.85
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.