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Soybean Market - Just My Opinion

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Soybean Oil takes it on the chin from the palm oil market as India hikes import tariffs to levels not seen for ten years. The Soybean Meal market rallies on Argentine weather concerns. Soybeans get caught in the middle of the two products opposite swings. As much as I dont want to get caught up in the Argentine weather concerns (barely 25% of their crop has been planted) I do realize the trade much prefers being long soybeans and soybean meal in the current time frame. Call it a weather premium for all of SA. Weather Brazil is currently showing no problems.

Most interior cash soybean markets continue to show a steady to higher bias. I say most as a prominent central Illinois processor is backing off on his bids but then again he led the initial rally in basis earlier this month. The Gulf remains nothing special as it has been easing for the past week or so. Soybean spreads within the crop year ran fractionally softer; stayingrelatively weak vs. the new crop. Interior offers to sell cash soybean meal remain at historic lows. The Meal export market saw some minimal improvement on Friday. Meal spreads run steady to fractionally softer despite the two-day rally. This tells me the rally is all spec inspired.

Are we looking at the second SA weather play of the season? The first started in late August and rain into early October when Brazil was touted as too dry and Argentina too wet. Call it what you will Ill call it a broad trading affair that keys off of when markets are expected to follow through in one direction and then dont. Soybean and soybean meal were hanging by threads midweek last week and when they didnt follow through to the downside the trade covered recent shorts that were done in the hole. I dont think growing conditions are that dire in Argentina so Ill say Jan beans stumble at the $10.00 level and Jan meal will stumble in the mid-high $320s.

Daily Support & Resistance for 11/21

Jan Beans: $9.80 - $10.00

Jan Meal; $318.0 - $325.0

Jan Bn Oil: $33.75 - $34.50

Trading Futures is Risky - You can lose everything and then some

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About the author

Tom Fritz is a third generation commodity futures trader. His grandfather and his father were traders on the exchange. Tom began his career in 1971 with Tabor Grain which was later acquired by Archer Daniels Midland. Prior to co-founding IFG in 1994 Tom was the lead Chicago Board of Trade floor analyst for ADM. He produces Just My Opinion, a daily grain commentary that is well respected and viewed all over the world.



Contributing author since 11/7/2017 

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