The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
My hunch a while back that we would trade in the $12.50 to $13.50 range for a while is still holding true. Yes, longer-term supply looks somewhat bearish, but demand both domestically and abroad simply remains too strong for the number of bushels currently available in the marketplace. Soybean stocks at terminals and elevators here in the US are about 8.5 million bushels below where they stood last year at this time. That seems to be due to several different factors - the delayed harvest, slow selling by producers, and high demand from end users. Basis bids remain steady to stronger for both soybeans and meal, and while that remains the theme producers should continue to garner higher cash bids. Keep in mind there continues to be questions regarding Argentine soy production and how some areas (to the north) are experiencing their worst drought in 50-years. Keep in mind, the trade has been looking for Argentine production to push higher by about 5 million metric tons, from around 48.5 million to around 53.5 million on a big jump in planted soy acreage. The fear is if the rains don't start coming in a major sort of way during the next several weeks all of these intended acres might not get in the ground. Many traders are also a little surprised to see Russia actually stepping in and buying US soybeans in bigger doses, generally something that just doesn't happen. Last year Russia only imported just over 80,000 metric tons of soybeans. So far for 2014/15 they have already booked close to 250,000 metric tons.
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What am I missing? Isn't 250,000 bu. 8% of 80,000 metric ton. That would be one month of straight line imports. We are now in the second month. So aren't they behind last year pace?