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Soybean Market - Just My Opinion

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The 11-15 day forecast for Argentina suggests better moisture may develop. That had the soybean and soybean meal markets running into some profit taking. Given the magnitude of the break we saw on Wednesday from high to low vs. where we settled I thought the bean and meal markets put in a relatively decent performance. Bean oil continues to suffer from higher than expected Canadian canola production as well as continued soft palm oilprices. Im told that palm oil prices registered 4 month lows last night. Going forward the trades focus will continue to be about Argentine weather/forecasts. Im not sure I place a lot of stock in a forecast that is two weeks out but time will tell. For what it is worth - Bloomberg News survey for the Dec 12th Supply-Demand update is suggesting the US soybean carryout will increase by 15 million bu. and the World carryout will dip by just 100 K T.

Other than the Ohio River basis (+6 cents) interior soybean basis locations ran unchanged on the day. The Gulf basis continues to suggest the US soybean export program is on the decline and/or losing market share. Soybean spreads within the crop year continue to grind lower while the year-to-year spreads saw some minor correction to its recent attempt to rally. Offers to sell cash meal continue to be historically low. Meal spreads ran mixed within the current crop year as did the old crop/new crop spreads.

The break in Jan beans today filled the recent Sunday opening gap higher and finished well above it despite closing lower on the day. Jan Meal balked at the old contract highs but given the settlement price in relation to the days low the market put in a rather decent performance. The bottom line to the current bean and meal markets rally will continue to be the weather outlook for Argentina (some are now adding RGDS to this outlook). Soybean oil has been trending lower for about one month unfortunately nothing in the recent price action suggests a turnaround is near at hand.

Daily Support & Resistance for 12/07

Jan Beans: $9.94 - $10.12

Jan Meal; $337.0 - $347.0

Jan Bn Oil: $32.90 ($32.50) - $33.55

Futures Trading is Risky - Be Careful Out there!!

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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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