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Soybean Market - Just My Opinion

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USDA (OCE) is suggesting soybean planted acres for 2018-19 will be 91.0 million (90.2 year ago) leading to a crop size of 4.360 billion bu. (yield 48.4 bpa) and a carryout of 376 million bu. (current projection for 2017-18 is 425 million)

Is it going to rain in Argentina late this week into the weekend? It seems this one event has been driving the market for the past few days. Rain for some of the drier areas of Argentina is forecast for later this week into the weekend. Come Sunday night, Monday will be a tell-all as to this rain event. Brazil continues to be in great shape. I find it interesting that the soybean trade will look at anything that may have some bullishness when it comes to the product markets. Prior to today the soybean market has been focusing on the meal market and its recent strength. Today we saw a minor reversal in the meal/oil spread. The strength in bean oil helped get the soybean market off of its lows. In the near term I dont see the soybean marketsustaining a move of consequence in either direction until we get a better handle on the forecasted Argentine rain event.

The interior soybean basis runs sharply mixed on Tuesday. The Ohio River declines noticeably, processors have been on an easing trend, the Illinois River flip-flops back and forth from locations to locations and the Gulf is flat. Soybean spreads within the crop year continue tyo grind sideways to lower. The infamous July/Nov spread has been trading between 15 cents and 20 cents (over) since late October. Offers to sell cash meal havent changed; they remain depressed. Meal spreads involving Dec and Jan are similar to the bean spreads; sideways to grinding lower. Spreads in meal with March as the leader have been trying to buck that trend.

Until we can get a better handle on the near term forecasted weather for Argentina expect the recent almost sideways chop in soybeans to continue. If forecasts continue to suggest better moisture watch meal lose to bean oil. If forecasts start to wane with their call for moisture watch the meal market reassert itself against the bean oil market. If the soybean market just relied on its own domestic supply-demand I have to think prices would be a lot lower.

Daily Support & Resistance for 11/29

Jan Beans: $9.82 - $10.02

Jan Meal; $322.0 - $332.0

Jan Bn Oil: $33.70 - $34.50

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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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