Advice: We advise hedgers to sell another [market advice is available to Pro Farmer subscribers only - start a trial subscription for $1.]
Price action: November soybeans rose 34 1/4 cents to $13.77 and near the session high. Prices hit a three-month high. August soybean meal gained $27.20 to $437.30 and nearer the session high. Prices hit a two-month high. August bean oil closed down the 400-point limit at 54.73 cents.
Fundamental analysis: A bull-blown weather market is playing out in the soybean and corn futures markets, which propelled soybeans and meal today. Soybean oil dropped to limit down today on surprising news the U.S. government will implement a smaller biofuel mandate that initially proposed.
Tuesday afternoon’s USDA crop progress ratings produced a bullish surprise for soybeans. The agency dropped its U.S. soybean crop rating more than expected to 54% “good” to “excellent,” with the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect) showing the soybean crop fell 10.6 points to 339.9, which is 26.1 points below year-ago.
Weather in the Corn Belt still leans bullish. However, remember that summertime weather patterns can change quickly and grains markets can “turn on a dime.” World Weather Inc. today reported that in the Midwest, dryness “will continue to be a problem in the next seven days. Any meaningful rainfall will be mostly limited to southeastern and far northwestern portions of the region.” However, some localized pockets of meaningful moisture will occur elsewhere. With temperatures being seasonably warm, crop stress will increase from Missouri through eastern Iowa, much of Illinois, and into Michigan and southern Wisconsin, said the forecaster. “A heavy, more generalized rain event is still needed” but such is not likely anytime soon, said World Weather.
The weekly USDA export sales report will be delayed one day, until Friday morning, due to the U.S. holiday on Monday.
Technical analysis: The soybean futures bulls have the firm overall near-term technical advantage. A steep three-week-old uptrend is in place on the daily bar chart and the bulls have momentum on their side. The next near-term upside technical objective for the soybean bulls is closing November prices above solid resistance at $14.00. The next downside price objective for the bears is closing prices below solid technical support at $13.00. First resistance is seen at today’s high of $13.76 and then at $13.90. First support is seen at $13.50 and then at today’s low of $13.41 1/4.
The meal bulls have gained the overall near-term technical advantage. A price downtrend on the daily bar chart has been soundly negated. The next upside price objective for the meal bulls is to produce a close in August futures above solid technical resistance at the April high of $456.00. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of $408.20. First resistance comes in at today’s high of $438.90 and then at $445.00. First support is seen at $430.00 and then at $425.00.
The soybean oil futures bulls still have the overall near-term technical advantage but are fading badly. Prices are still in an uptrend on the daily bar chart, but it’s in jeopardy. The next upside price objective for the bean oil bulls is closing August prices above solid technical resistance at the June high of 59.39 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 50.00 cents. First resistance is seen at 56.00 cents and then at 57.00 cents. First support is seen at 54.00 cents and then at 53.00 cents.
What to do: [market advice is available to Pro Farmer subscribers only - start a trial subscription for $1.]
Hedgers: NEW ADVICE -- Sell another . . . [market advice is available to Pro Farmer subscribers only - start a trial subscription for $1.]
Cash-only marketers: NEW ADVICE -- Sell another . . . [market advice is available to Pro Farmer subscribers only - start a trial subscription for $1.]
