Soy-Sanity continues to be the theme of the Ag markets
May 24, 2013
If its not headlines about port-worker strikes in South America (first in Argentina, now possibly Brazil), then its rumblings about China's government cracking down on the "financing game" being played by Chinese importers. Normally I would be telling you this Chinese rhetoric should prompt some additional cancellations, but this time around there were rumors circulating that the "letter of credits" are getting called in early, forcing some in China to price and take delivery of beans much sooner then anticipated. Lets also not forget the rumors that some big Chinese hedgers were supposedly caught short Maybe this is all over hyped nonsense...maybe not???
Regardless the market is extremely nervous as seen by yesterdays $0.59 cent range in the JUL13 soybean market. Some analyst believe it could be the "blow-off-top" technicians have been waiting for. If this is true and traders playing the bull-spreads start to get spooked by the recent price action, heavy liquidation could cause the new-crop to rally even higher, possibly even testing the major resistance I keep talking about up around $12.60 in the NOV13 contract. With this in mind, producers who need to make catch-up sales in new-crop beans should be thinking about pulling the trigger on another round just north of $12.55.
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