Current Marketing Thoughts
By: Kevin Van Trump
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Does the Bean Balance Sheet Tighten with USDA News?
Mar 21, 2014
Soybeans continue with the same song and dance...Chinese demand, South America production and extremely tight US supplies. Despite the recent setbacks in China, their total "commitments" for US beans are still some 25% higher than last year. This number is simple HUGE and has been extremely hard for the market to fully digest. As each week passes without major Chinese cancellations the trade simply becomes more fearful of an even tighter USDA balance sheet. As of right now, most believe the Chinese have fewer than 1.5 million tons of soybeans left to ship out of the US. This means the USDA's current soybean export estimate of 1.53 billion is more than likely still way too low, some suggesting by 30-50 million bushels too low. The bears then argue this increase in exports is going to be offset by a much higher increase in imports (60-80 million). Which we are already starting to see as Brazilian beans will soon start hitting US shores (April-May deliveries). That is then trumped again by the bulls who say if "imports" increase substantially then so will the US crush (by 25-45 million bushels)...and so the game of he said she said continues in a vicious cycle. With the highly anticipated USDA reports just around the next corner (March 31st) and talk that the USDA could drastically increase new-crop soybean acres we might start to see some of the bulls squaring up a few positions. I continue to believe the $14.60 high in the MAY14 contract (set back on March 7th) is safe and will hold as heavy resistance until the trade can better digest the March Quartelry Stocks Report and Planting Intentions. CLICK HERE for my daily report...