Sep 3, 2014
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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

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

Will the Bean Balance Sheet Puzzle be Solved in USDA Reports?

Jun 25, 2014

Soybeans catch a bit of breeze behind their back to start trading this morning. It seems a few US crushers (primarily those with Bio) have once again started bidding up for supplies. China appears to be snooping around for more AUG soybeans and the trade seems to be a bit more concerned about the lack of rainfall in India (and what it could mean to the Oilseed market). Here at home traders continue to debate several market uncertainties and eagerly await Monday's USDA Quarterly Stocks & Acreage numbers. Below are a couple of thoughts:  CLICK HERE for my daily report....

  • Old-Crop Balance Sheet: Does more price rationing need to be done or has the market completed it's objective? The bulls are fully prepared to see the lowest June 1 stocks figure in some 37 years. The bears continue to argue and believe the USDA is going to raise their total old-crop production estimate by 20-50 million bushels. Simply telling the trade they underestimated last years crop. This would obviously offset any higher adjustments the USDA deems appropriate for the crush and or export demand side of the equation. There trade also appears to be a bit more nervous about total soy imports and will be looking for some reassurance from the USDA that the bushels are going to show up.  CLICK HERE for my daily report...
  • New-Crop Supplies: While the old-crop balance sheet is important, the other key part of the equation is new-crop supplies. In particular how many US soybean acres are we dealing with in 2014. Most of the trade seems to be thinking the USDAs current estimate is a bit conservative and that ultimately 82-83 million soybean acres will be in play. Keep in mind many areas have seen very heavy rainfall totals and there is still an estimated 1.5 million soybean acres that have yet to be planted. Moral of the story, the trade might be a bit surprised if the USDA fails to raise their current acreage estimates to levels the trade is anticipating. I hate to say it, but from where I sit, I wouldn't be surprised to see the USDA catch a large portion of the trade offsides by throwing out a downward adjustment closer to 80 million acres. I just have a hard time digesting more than a 5% jump in soybean acres. Just remember, back during the early-March survey neither corn or beans looked to be very profitable, therefor most producers we looking for the best ways to limit downside losses...soybeans provided that play with fewer input costs. As planting rolled around and prices started moving higher that theory went out the window for many.  CLICK HERE for my daily report...
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