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NEAR-TERM MARKET FUNDAMENTALS: The market is seeing a clash of positive outside market forces with negative soybean supply and demand news. The end of strike in Argentina and the potential resumption of exports of meal and oil from the world’s largest exporter is seen as a negative force. In addition, news of record large US plantings of soybeans and higher than expected US March 1st stocks are negative forces for the market to absorb. After some weekend storms, the Midwest looks to get hit with more rain for Tuesday through Thursday and this is likely to be seen as somewhat positive news short-term, but mostly for corn. Delayed corn plantings, in the end, could lead to even higher planted area for soybeans. Early pressure on Thursday came from follow through selling after Wednesday’s collapse along with news that a strike by port workers in Argentina has been settled. Weekly export sales were in line with trade expectations in soybeans and soyoil, but below expectations in meal. Net sales for soybeans came in at 178,500 tonnes for old crop and 210,000 for next year for a total of 388,500. As of March 25, cumulative soybean sales stand at 94.1% of the USDA forecast for 2009/2010 versus a 5 year average of 86.6%. Old crop meal sales came in at 68,100 tonnes with oil sales came in at 14,000 tonnes. The Commitments of Traders reports as of March 30th for Soybeans showed non-commercial traders were net long 35,845 contracts, an increase of 5,135 contracts. The Nonreportable traders were net short a record high 60,739 contracts. The CIT Supplement report showed Commodity Index traders held a net long position of 164,465 contracts. This represents a decrease of 7,524 contracts in the net long position held by these traders. In meal, non-commercial traders were net long 21,900 contracts, an increase of 7,287 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 28,631 contracts, up 9,872 contracts in the net long position held by these traders. In oil, Non-Commercial traders were net long 11,627 contracts, a decrease of 10,037 contracts in just one week. The non-reportable traders were net long 5,419 contracts, a decrease of -7,653 contracts for the week.
TODAY’S GUIDANCE: Trend-following fund traders were massive sellers of oil for the week to shift to a net short position while trend-followers in soybeans were buyers to shift from a net short to a net long position. With Argentina exports expected to pick-up steam, the meal and soybean markets look to come under long liquidation selling pressures. Brazil soybean exports for March were pegged at 3.086 million tonnes which was up from 663,800 tonnes on February and 2.642 million last year. Meal exports also jumped. July soybean selling resistance comes in at 956 1/4 and 961 1/2 with 930 and 909 1/4 as next objectives.
TODAY’S MARKET IDEAS: November soybean selling resistance comes in at 927 1/2 and 932 1/2 with 895 and then 880 1/2 as next downside objectives.
Soybean Market Commentary – 2010.03.05
by Terry Roggensack on April 5, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: The market is seeing a clash of positive outside market forces with negative soybean supply and demand news. The end of strike in Argentina and the potential resumption of exports of meal and oil from the world’s largest exporter is seen as a negative force. In addition, news of record large US plantings of soybeans and higher than expected US March 1st stocks are negative forces for the market to absorb. After some weekend storms, the Midwest looks to get hit with more rain for Tuesday through Thursday and this is likely to be seen as somewhat positive news short-term, but mostly for corn. Delayed corn plantings, in the end, could lead to even higher planted area for soybeans. Early pressure on Thursday came from follow through selling after Wednesday’s collapse along with news that a strike by port workers in Argentina has been settled. Weekly export sales were in line with trade expectations in soybeans and soyoil, but below expectations in meal. Net sales for soybeans came in at 178,500 tonnes for old crop and 210,000 for next year for a total of 388,500. As of March 25, cumulative soybean sales stand at 94.1% of the USDA forecast for 2009/2010 versus a 5 year average of 86.6%. Old crop meal sales came in at 68,100 tonnes with oil sales came in at 14,000 tonnes. The Commitments of Traders reports as of March 30th for Soybeans showed non-commercial traders were net long 35,845 contracts, an increase of 5,135 contracts. The Nonreportable traders were net short a record high 60,739 contracts. The CIT Supplement report showed Commodity Index traders held a net long position of 164,465 contracts. This represents a decrease of 7,524 contracts in the net long position held by these traders. In meal, non-commercial traders were net long 21,900 contracts, an increase of 7,287 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 28,631 contracts, up 9,872 contracts in the net long position held by these traders. In oil, Non-Commercial traders were net long 11,627 contracts, a decrease of 10,037 contracts in just one week. The non-reportable traders were net long 5,419 contracts, a decrease of -7,653 contracts for the week.
TODAY’S GUIDANCE: Trend-following fund traders were massive sellers of oil for the week to shift to a net short position while trend-followers in soybeans were buyers to shift from a net short to a net long position. With Argentina exports expected to pick-up steam, the meal and soybean markets look to come under long liquidation selling pressures. Brazil soybean exports for March were pegged at 3.086 million tonnes which was up from 663,800 tonnes on February and 2.642 million last year. Meal exports also jumped. July soybean selling resistance comes in at 956 1/4 and 961 1/2 with 930 and 909 1/4 as next objectives.
TODAY’S MARKET IDEAS: November soybean selling resistance comes in at 927 1/2 and 932 1/2 with 895 and then 880 1/2 as next downside objectives.
Tags: Beanoil, Grains, Soybeans, Soymeal
About Terry Roggensack