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NEAR-TERM MARKET FUNDAMENTALS: The new highs for the move for palm oil overnight and news that China soybean futures were strong coming back from holiday plus the jump in wheat futures helped support the market overnight. The positive tilt to grains and food security concerns continue to provide underlying support which has been offset recently by improving supply news from South America. Heavy rains this week in Argentina have eased any dryness concerns for now even though there is a mostly dry forecast just ahead. Brazil officials pegged the soybean crop at a record 70.1 million tonnes from 68.55 million as their January forecast. A late rally in meal after early pressure to the lowest level since February 1st yesterday helped to support a strong close in the soybean complex. November soybeans pushed higher as traders see the need for soybeans to compete with other crops to expand planted area for the coming season. November soybeans posted a new high for the move overnight. A potential slowdown in the China economy due to an interest rate hike was seen as a negative factor, especially for markets like soybeans where China is the major importer on the world market. Talk of the overbought condition of the market, talk of higher/record Brazil production for the upcoming harvest and talk of the hefty net long position of fund traders were all factors which led to the long liquidation selling following the China news. Traders see higher exports as a reason to suspect lower ending stocks in the supply/demand update for this morning with many traders looking for a decline of 5-10 million bushels from 140 million posted last month. Gulf basis levels were steady to higher with slow river movement and firm export tone helping to support. The late rally pulled March soybeans up near 20 cents from the day’s lows to close near the day’s highs.
TODAY’S GUIDANCE: Brazil news and good rains in Argentina this week are slowing the flow of funds to the soybean complex but tightening vegetable oil supply continues to provide support. If the other grains move higher, November soybeans needs to follow as there is a threat that planted area will be lower for soybeans this year due to corn, cotton and wheat rallies.
TODAY’S MARKET IDEAS: November soybean buying support comes in at 1371 with 1445 and then 1498 as upside targets. May soybean support moves up to 1428 3/4 with 1484 3/4 as next objective. May soybean oil support is 58.97 with 61.75 as next upside objective.
Soybeans: If Other Grains Higher, Nov Beans Needs to Follow
by Terry Roggensack on February 9, 2011
Below is a sample of The Hightower Report’s 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 new highs for the move for palm oil overnight and news that China soybean futures were strong coming back from holiday plus the jump in wheat futures helped support the market overnight. The positive tilt to grains and food security concerns continue to provide underlying support which has been offset recently by improving supply news from South America. Heavy rains this week in Argentina have eased any dryness concerns for now even though there is a mostly dry forecast just ahead. Brazil officials pegged the soybean crop at a record 70.1 million tonnes from 68.55 million as their January forecast. A late rally in meal after early pressure to the lowest level since February 1st yesterday helped to support a strong close in the soybean complex. November soybeans pushed higher as traders see the need for soybeans to compete with other crops to expand planted area for the coming season. November soybeans posted a new high for the move overnight. A potential slowdown in the China economy due to an interest rate hike was seen as a negative factor, especially for markets like soybeans where China is the major importer on the world market. Talk of the overbought condition of the market, talk of higher/record Brazil production for the upcoming harvest and talk of the hefty net long position of fund traders were all factors which led to the long liquidation selling following the China news. Traders see higher exports as a reason to suspect lower ending stocks in the supply/demand update for this morning with many traders looking for a decline of 5-10 million bushels from 140 million posted last month. Gulf basis levels were steady to higher with slow river movement and firm export tone helping to support. The late rally pulled March soybeans up near 20 cents from the day’s lows to close near the day’s highs.
TODAY’S GUIDANCE: Brazil news and good rains in Argentina this week are slowing the flow of funds to the soybean complex but tightening vegetable oil supply continues to provide support. If the other grains move higher, November soybeans needs to follow as there is a threat that planted area will be lower for soybeans this year due to corn, cotton and wheat rallies.
TODAY’S MARKET IDEAS: November soybean buying support comes in at 1371 with 1445 and then 1498 as upside targets. May soybean support moves up to 1428 3/4 with 1484 3/4 as next objective. May soybean oil support is 58.97 with 61.75 as next upside objective.
Tags: Graings, Soybeans, Soymeal, Soyoil
About Terry Roggensack