Its been a choppy ride in the soy complex with Nov 19 Beans finding support between 860/855, while resistance comes in at 880/883. Prices cant find much conviction to crash through support or aggressively take out resistance. At least for today beans saw some friendly demand news enter into the market. Export sales of 451,766 metric tons of soybeans for delivery to Mexico during the 2019/2020 marketing year was announced by FAS (Foreign Ag Service) this morning. The demand news comes after a crop condition report that came in unchanged at 55 percent good to excellent released last night. Inside the numbers saw #1 producer Illinois down 4 points to 46 percent G/E, number 2 producer Iowa down two points to 60 and number three producer Minnesota down 2 points to 58 percent good to excellent. These three states account for 34 percent of planted acreage on top of that approximately 10.7 million acres have yet to set pods according to the USDA. The flip side to any bullish argument for prices is weather and demand. Warmer and wetter into mid-month through these key areas is to me bearish. Now that can change in a New York minute especially if colder than normal temps emerge the last two weeks in September and early October where potential frost /freezes may occur. Currently European models as well as NWS forecasts have no such threat in 11 to 15 and 16 to 20 day forecasts. For me, post harvest, where is demand going to come from should tariffs and trade wars still exist? I’m not sure where significant buying is going to come from and what affect it will have on price once US supply side becomes more of a known closer to harvest.
Looking at the daily bean chart, today’s settle at 875 comes right a the midpoint or mean of the recent high/low. In my view we will not be in this range for much longer. Perhaps next weeks September 12th WASDE report will prod bean prices out of this range. In my opinion I would take coverage with puts at the 860/850 range while at the same time buying calls at the 9.00 level. I just can’t see the market staying range bound for much longer. Call or email me with any questions or comments. 888 391 7894 or slusk@walshtrading.com. I hold my weekly grain and livestock webinar this Friday at 2 pm Central. Sign up is free. We discuss supply demand, weather, trading ideas, and the charts. Sign Up Now