You are here

Holding a neutral posture on soybean market

Closing Cattle Commentary

Live Cattle: Packers gave in and paid $94, which is $2.00 higher than last week for cattle in the Texas and Kansas. Feedlot conditions are the proverbial "thorn in the side" for managers as rate of gain is a major problem. On the demand side of the equation, beef values at $150 and higher creates consumer resistances at the retail counter. However the strength in futures provided incentive for feedlots to hold out for more money. April cattle futures were up $2.15 for the week while April Feeders were up $.77.

Direction: The April contract hit the same high price made in May of 09. This high weekly close is leaving us with a positive feeling about this market. Because of the overbought technical indicators and our concern over product demand we are willing to consider getting hedges in place. Call Allendale at 800-262-7538…Paul Georgy

Trading Recommendation:
(03/10) Sold April at 94.30, risk to 95.80 with objective of 90.80. Closed at 95.10.

***Disclaimer*** The commentary and trades below are derived from technical indicators provided in our Allendale Advanced Charts pages and may not correspond with the fundamental commentary above.

Advanced Charts Direction: Cattle are reaching into a gap on the weekly chart from 2008 that goes up to 95.25. This is just shy of 62% retracement at 96.22. Could that level be reached next? The current uptrend is very steep yet and vulnerable to sharp corrections…Monica Moehring

Vital Technical Indicator: Next projected major turn day for live cattle is March 24 and for feeders is March 17.

Closing Soybeans Commentary

Soybeans: Here is the scoop, before the trade opened USDA reported 220 K tonnes of US beans sold to China and wire services all convinced old crop beans could open 10-12 higher. After the open USDA revised the purchase to new crop soybeans (don't you think the US seller would know the difference?) and that fact along with the weaker crude oil sent beans lower. Old crop supply is less than 200 million bushels which we view as supportive to bean futures. Seasonally, US soybean futures work higher from here as the trade anticipates soil temps, rotation, per acre revenue and a host of other issues. China is expected to decrease soybean production in 2010. Take a look at soybean meal and how it has lost its inverse as Argentina takes over on exports, get into a spread.

Direction: We are holding our neutral market view right now. For now, support in the May futures is 916 with resistance of 9630. We are long old crop...Joe Victor

Working Trade(s):
(03/01) Sold May 930 put/sell May 1030 call 32 3/4, risk 58, objective 0. Closed 33 1/4.
(03/11) Bought May 930, risk 916, objective 960. Closed 925 1/2.

***Disclaimer*** The commentary and trades below are derived from technical indicators provided in our Allendale Advanced Charts pages and may not correspond with the fundamental commentary above.

Advanced Charts Direction: Beans remain in a long-term downtrend since the summer high posted in 2008. There are several levels of support coming up though at 9.00, 8.78 3/4, and 7.76 1/4. We don't expect them all to be tested, just noted…Monica Moehring

Vital Technical Indicator: The next projected major turn day for soybeans is March 23, soybean meal is March 26, and soybean oil is March 23.

Rich Nelson
Director of Research
Allendale, Inc
4506 Prime Parkway
McHenry, IL 60050

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or adhere to a particular trading program in spite of trading losses are material points which can adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

Closing Cattle Commentary

Read more about

Talk in Marketing

Most Recent Poll

I will cut expenses by reducing: