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RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Top 5 Reason for the Recent Soybean Break...

Jan 03, 2014

Soybean bulls continue to talk "liquidation" as the front-end of the market has given back over $0.75 cents in the past seven trading days. In fact new-crop NOV14 beans have now dropped to their lowest level in some 2-years!  This mornings export sales data was above expectations and should help give the trade a little bounce. There is nothing really NEW to discuss, below are my "Top-5 Reasons for the recent Break" … 

 

  1. South American weather has once again improved and for the most part remains a non-event.  
  2. The fear of Chinese soy cancelations is in the air.  
  3. Brazil is already harvesting early-soybeans and will soon be at full-throtle in less than 3-weeks. Early reports are that most areas are seeing terrific results and Brazil should be on track to post another record soybean harvest (possible north of 90 MMTs vs 82 MMTs last year). 
  4. Technical selling may also be causing some recent pressure. Remember, unlike corn and wheat the funds have been big buyers and holders of long poisons in the front-end of the bean market. As price break through major support at the 40, 50 and 100-day moving averages.....Click here for all my comments......  
  5. Cheaper DDG prices are prompting some end-users to make the switch away from meal and over to DDGs.  When the headlines read that China was not only canceling corn cargoes but also DDGs, prices quickly broke to the downside. Theory is the cheaper costs for DDGs may cause less domestic demand for meal and hence more available supply.  Keep in mind meal has been the driving force of this entire rally, if it loses its luster the bean market is in trouble.                                           Click here to get my daily grain report......
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