Commentary
Managed funds after liquidating to a near neutral position in soybeans are in my view playing the soy seasonals and buying the dips following last week’s WASDE amid 60 percent harvest progress in my opinion. Rumors that China bought a few cargoes of US beans combined with a close over the 200-week moving average on the weekly continuous chart. However, it was meal that led the market today while bean oil weakened up after a bullish crush report on Monday. Whether its bean oil or meal leading the market, US crush margins are on the rise with cash returns gaining $.50/bushel in 1 week. Meal market continues to be supported by seasonal strength, Argentina’s record low supply of beans to crush, and China’s announcement of highest quarterly hog output in 10 years spurred more buying today. We will see if the conflict in the Middle East spills over to other countries in the region while the trade awaits the latest announcement on demand with sales for futures shipment released tomorrow morning. Until then bean technical levels for the remainder of the week come in as follows. Support is down at 1300, the 200-week moving average and then 1295. A close under 1295 and its katy bar the door to trendline support at 12.70. Under 12.70, the next level of support is the bottom edge of the Bollinger Band at 1256. Resistance is at 1323. A close over and its 1333.Over 1333, and the market can challenge 1365 and then 1377. Chart below.
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