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Soybean Market - Just My Opinion

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Dry weather/forecasts for Argentina continue to be the dominant factor for the higher soybean and soybean meal trade. Jan beans are at levels not seen since late July when the market was in the midst of breaking down. Jan meal is flirting with contract high levels made in early July. July meal is in new contract high ground. For what it is worth my opinion is that the spec trade is heavily pursuing the long soybean and soybean meal markets due to the idea that any major losses in Argentine production will have a greater impact on the soy supply-demand balance sheets (both US and World) vs. its impacts on corn just my opinion.

Decatur, IL is the only interior location poking its nose up on Tuesday. Board crush at $1.15 mandate crushers lock in this kind of margin. All other interior soybean locations are showing steady to easier basis levels. Bull spreads improved fractionally within the crop year; noticeably improved vs. the new crop. Offers to sell cash soybean meal continue to be depressed; both truck and rail. Despite this meal spreads see minor improvements within the crop year; gaining noticeably vs. the new crop. I have to think the bull spreading in both beans and meal is more about the current flat price rally vs. legitimate improving demand. I wouldnt be surprised to see the USDA lower soybean exports on the December 12th Supply-Demand update.

Charts for soybeans and soybean meal continue to read higher. These two markets will remain prone to moving higher as long as Argentineweather continues to be an issue. It should be noted that daily technical data does not read oversold nor does the shorter term inter-day data. For that matter intra-day technical data does not read overbought. Soybean oil is trying to establish some short term support but the rally in meal (inter-market spreading) keeps this market depressed. Palm oil at 4 month lows adds to the ongoing bearishness.

Daily Support & Resistance for 12/06

Jan Beans: $9.99 - $10.22

Jan Meal; $338.0 - $350.0

Jan Bn Oil: $33.00 - $34.00

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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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