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Soybeans - Just My Opinion


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USDA announces 120.0 K T. new crop (2020/21) soybeans sold to Unknown

The soybean market continues to play the waiting game as it hopes the signing of the US/China trade accord tomorrow (or shortly thereafter) will give the trade some direction. Everything I read suggests not to hold my breath for specific details on trade quantities as only dollar amounts per sector will be given. One of the news wires runs a story that suggests the current $360 billion in tariffs on Chinese imports will stay in place for at least 10 months which coincides with the November elections. Soybean meal challenges the recent high side of its minor trading range and gets turned away. Soybean oil tests minor support ($33.50 March) and manages to bounce. Supposedly there is all sorts of Brazilian soybean business going on as the producer down there is fearful that the signed US/China accord will prompt a shift away from Brazil and back to the US. Harvest is just getting under way in Brazil and yields so far look great. As of this writing Brazilian origin makes US origin look expensive.

The interior soybean basis is seeing few if any changes. The soybean processor still shows the best basis levels. The Gulf is fully steady at recent highs. Soybean spreads ran steady upfront while showing fractional strength against the deferred. The interior soybean meal basis sees new lows. Bids at the Gulf for soybean meal go unquoted. Meal spreads showed minor weakness going out to September.

So here we sit and wait. March beans closing above $9.55 will look good while closes below $9.35 not so good. March meal has a similar look meaning closes above $308.0 will be well received while closes below $299.0 not so much. Soybean oil has now corrected (high to low) just over 200 pts. Thats in keeping with the sizes of previous corrections. Resistance for March bean oil begins at the $34.50 level. Taking out todays low will suggest another 100 pts lower.

Daily Support & Resistance for Jan 15th

March Soybeans: $9.34 (?) - $9.55

March Soybean Meal: $299.0 (?) - $308.0

March Soybean Oil: $33.50 (?) - $34.50

The risk of trading futures and options can be substantial. Each investor must considerwhether this is a suitable investment. Past performance is not indicative of future results.

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QUESTIONS ABOUT THIS REPORT OR THE MARKETS?

Contact me!Tom Fritz, Agricultural Market Analyst at1.800.786.4475.

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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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