Commentary
January soybeans soared 35 cents before closing at $13.82 1/2, ending on the session highs. December soybean meal rose $19.70 after trading limit up mid-morning, settling at $469.10. The funds love to trade soybeans to the long side, and in my view, this was the case today for beans and meal. Hot and dry weather in central Brazil shows no signs of letting up and rain chances in further out forecasts have little faith by the trade as previous rain forecasts haven’t verified. Argentina is still reported to be absent of beans to crush and Brazil’s exportable supply has been drawn down. These are knowns in the market in my view but if you couple those with weather threats in the World’s number one bean producer that raises questions on yield, and the path of least resistance is higher in my view. It is my belief that today’s bean rally prompted short covering by funds holding aggressive corn positions. To a lesser extent this occurred with wheat to in my opinion. Technical levels for the remainder of the week show beans potentially challenging the 14.03/06 area after today’s rally. A close over and its 1448 to 1453. Support is down at 13.77. A close under and it s13.64. A close under 13.64 and its 13.43/41. Under 13.41 and its 13.06.
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Sean Lusk
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