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Mon, Sept 28, 2015 Active Harvest, good yields weigh on soy complex.

 
Monday, September 28, 2015

***** Fundamental Analysis: Active harvest and the persistence of good yield reports weighed on the soybean complex to start the week, along the decline in financial markets and energy.  The latter has become an important variable in the soy complex with 25% of our domestic demand for soyoil going to biodiesel.  Today’s export inspections, 19.5 mln. bu. were a little better than last week, but off last year’s level of 25.6.  But they do indicate the pace of shipping is starting to ramp up.  And numbers out of Brazil continue to indicate their shipments are slowing down.  We don’t see shipments as strong as last year’s 100 mln. bu. per week peak, but should get up to the 60 mln. per week level this year.  On the daily system, the USDA reported 249,000 tons were sold to China, along with 1 mmt. priced out of the 2016 crop.  There will be more with the prices established on the purchase agreements signed last week.  Harvest is expected to be reported 18% complete, mostly in the eastern and northwestern parts of the Corn Belt; the USDA reported 21%.  Wednesday’s grain stocks loom large for this week.  The trade is looking for 205 mln. bu.  The revision for last year’s crop should not be ignored either as its yield compares to the forecast for this year’s crop.


***** Tech Comment: Not surprisingly, Nov. soybeans stopped just short of its last interim high at $8.95.  The action still hints prices turned up out of the 16-18 week low last week, but at the least needs to close over $8.95 to swing the odds in favor of that.  Until then, the possibility of seeing a test of targets/supports in the $8.40-$8.50 range will persist.  $9.00 is psychological resistance, with important short term resistance at $9.09.  The window for the 16-18 week cycle to bottom extends into the early part of October.  And until there’s an indication of a short term change in trend, it’s possible prices might make a quick break to $8.00 if $8.40 gives way.  But the last time that happened, prices were only under $8.50 for a part of 2 weeks.  


***** Basis Trends:  Gulf +90 – stdy, Eastern Corn Belt – dn 65/stdy, Western Corn Belt – dn 10/up 5.


***** Basic Recommendation:  **** We aren’t ......Premium Service Only


***** Cash Marketing Strategy:  If you know ..... Premium Service Only 


***** Futures/Options Strategy/recommendation: ***** Hold the ​..... Premium Service Only


***** Basic Position: 2014 crop: 2015 crop: ​....Premium Service Only


***** Hedge/Option Position:  Long ​....Premium Service Only

  SYMBOL IN EVEN SQUARE