Soybean traders debating the USDA's most recent "planting progress" estimates, bears are thinking the 85% is too low considering the improved weather window. Bull's on the other hand thinking the 85% estimate could still be too high. Hard to swallow the USDA's report of Michigan being 100% planted. When producers from the state called into the office saying they still have 20-40% to plant on top of several patches of "re-planting." Also interesting to note is the fact there is still thought to be over 26 million soybean acres not yet "emerged." Over 4 million in IA alone are not yet emerged, almost 4 million in the Dakota's, another 3 million plus in IL, close to 2.5 million in MN, another 4 million plus between MO and KS, etc... Same song and dance, with old-crop supplies so extremely tight the trade is apprehensive to take away the recent "weather premium" that has been added. Bulls want to actually see that the crop is planted and in good condition before giving up on another run above $13.50 in new-crop.
I should also point out yesterday's NOPA crush numbers where much better than the trade had been looking for. Most insiders thought the crush numbers were going to come down from April's 120.1 million bushel estimate, instead the May crush was reported at just over 122.6 million bushels. Mixed was the fact that meal exports actually fell from April's 506 million tons down to just under 426 million in May. On the flip side soy oil stocks actually dropped. Bean bids remain "unchanged," as there remain questions surrounding near-term export and domestic demand estimates. Producers can continue to hold final 5-10% of production, just make sure you keeping the basis locked and your price floor in place. Only real thing to speculate on is a price squeeze of some sort on the board. Bull-spreaders and product spreaders should proceed very cautiously, easy money is gone and game could change in a blink of an eye. Several respected sources continuing to eye better risk-to-reward ratios in being long NOV14 vs. short NOV13 contracts. Might not be a bad play for producers to consider as well (make sure you talk it over with your advisor and understand all of the associated risk with spread trading).
Make sure you understand, bearish traders are becoming more concerned about price appreciation in nearby soy contracts, because "meal" premiums in China are continuing to decrease as more and more South American supplies hit their shore. There is also some speculation that the USDA might come out and say US soy production last year was "understated" by 15 to 25 million bushels, essentially offsetting the thoughts of any increases in domestic crush estimates. The "crush" number looks to be one the USDA has no choice but to increase, how they choose to offset this number is the question...further lower exports or magically find more bushels??? Maybe both! For an inside look at what is driving the grain prices,CLICK HERE, for my full report.