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NEAR-TERM MARKET FUNDAMENTALS: Strong seasonal buying support and continued buying from funds and specs supported the early rally yesterday to push July soybeans to the highest level since January 12th. However, the lower close is seen as a bearish technical development for the market. In addition, technical indicators are showing an overbought condition and open interest is relatively high. Traders indicate that the spread differential between November soybeans and December corn does not show an advantage to corn like it did just one month ago and that this would indicate that producers are likely to move to soybean plantings when corn plantings are complete. In some years, dry weather at this time of the year could lead to extra corn acres at the expense of soybeans. This week’s export inspections for soybeans were 8.03 million bushels, down from last week but in line with the average needed each week to reach the USDA’s export projection for 2009/10. Total soybean export inspections to date stand at 89.5% of the USDA’s projection versus a 5-year average of 81.2%. Statistics Canada reports that farmers in Canada intend to plant 16.9 million acres to canola this year, up 4.4% from last year’s total of 16.2 million but this was well below trade expectations and some traders believe that actual plantings will end up near 17.5 million acres. Heavy rains slowed the Argentina harvest this week with the crop now about 54% harvested as compared with 67% at this time last year. Cash basis levels in central Illinois firmed 2 cents yesterday as light producer selling persists. South Korea is tendering to buy 100,000 tonnes of new crop non-GMO soybeans.
TODAY’S GUIDANCE: The market seems to be having a tough time rationalizing the $10 price for July soybeans and the reversal seems to be a good reason for longs to considered exiting the market. With high open interest and plenty of soybean sellers from South America, the liquidation correction could be significant. We expect a burdensome supply of soybeans and meal will pressure the market as soon as the world pipeline is filled.
TODAY’S MARKET IDEAS: A 50% correction of the December to February break leaves 1006 as a key pivot point for July soybeans today with next key resistance at 1026 1/4.
Soybean Market Commentary – 2010.04.27
by Terry Roggensack on April 27, 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: Strong seasonal buying support and continued buying from funds and specs supported the early rally yesterday to push July soybeans to the highest level since January 12th. However, the lower close is seen as a bearish technical development for the market. In addition, technical indicators are showing an overbought condition and open interest is relatively high. Traders indicate that the spread differential between November soybeans and December corn does not show an advantage to corn like it did just one month ago and that this would indicate that producers are likely to move to soybean plantings when corn plantings are complete. In some years, dry weather at this time of the year could lead to extra corn acres at the expense of soybeans. This week’s export inspections for soybeans were 8.03 million bushels, down from last week but in line with the average needed each week to reach the USDA’s export projection for 2009/10. Total soybean export inspections to date stand at 89.5% of the USDA’s projection versus a 5-year average of 81.2%. Statistics Canada reports that farmers in Canada intend to plant 16.9 million acres to canola this year, up 4.4% from last year’s total of 16.2 million but this was well below trade expectations and some traders believe that actual plantings will end up near 17.5 million acres. Heavy rains slowed the Argentina harvest this week with the crop now about 54% harvested as compared with 67% at this time last year. Cash basis levels in central Illinois firmed 2 cents yesterday as light producer selling persists. South Korea is tendering to buy 100,000 tonnes of new crop non-GMO soybeans.
TODAY’S GUIDANCE: The market seems to be having a tough time rationalizing the $10 price for July soybeans and the reversal seems to be a good reason for longs to considered exiting the market. With high open interest and plenty of soybean sellers from South America, the liquidation correction could be significant. We expect a burdensome supply of soybeans and meal will pressure the market as soon as the world pipeline is filled.
TODAY’S MARKET IDEAS: A 50% correction of the December to February break leaves 1006 as a key pivot point for July soybeans today with next key resistance at 1026 1/4.
Tags: Beanoil, Grains, Soybeans, Soymeal, Soyoil
About Terry Roggensack