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Current Marketing Thoughts

RSS By: Kevin Van Trump,

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

Beans Off Early Highs as China Switches Cargoes

Mar 20, 2014

Soybeans traders continue to be somewhat confused. Most believe the two key major dynamics: Chinese Demand and South American production/logistics are NOT bullish! Logistic in South America are much improved compared to last year. The corp is being harvested in a timely fashion and appears to be moving out of the ports without many major hiccups. The South American crop also appears to be 5-10 MMTs larger than last year. All of which the bears can argue is NOT bullish. As for China, Shandong Sunrise Grain and Oil Trading (China’s biggest soybean importer), recently confirmed they have in fact "re-sold" three cargoes of Brazilian beans to US crushers. Supposedly, from what I have heard floating around, the company sold about 180,000 metric tons in the past couple of days and is looking to sell even more. Thoughts now are that 5-10 cargoes have been re-sold back to US crushers. There is also confirmation circulating that China has "delayed" or backed-up somewhere between 500,000 and 1 million metric tons of South American soy shipments because of less than anticipated demand caused by bird-flu and negative hog margins. Meaning current Chinese "demand" is also NOT considered bullish. What many traders could be overlooking however is that the larger fund traders have leap-frogged these two dynamics in preference of focusing on what could be a massively bullish March 1st "Quarterly Stocks" Report. It's hard to get my hands around it entirely, but "money-flow" certainly wants to try and push the soybean price border further to the North. The recent March high of $14.60 vs. the MAY14 contract still stands, but for those who are fighting the battle from the short-side, I am afraid we might soon start to see more of the troops advancing towards the rear.  There is no question US soybean import estimates are going to rise, but increasing crush numbers, better than expected exports and a negative residual has the trade fearful of a record tight March 1 stocks report.  CLICK HEREfor my daily report....

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