Don't rule out $13.50 soybeans...
Jun 07, 2013
Soybeans bulls continue to believe the market will eventually test the early 2013 new-crop highs set at $13.50^6 on February 4th. Bears might be laughing, but as of right now I wouldn't rule this out of the realm of possibility. Especially as more and more producers talk about soybean acres that simply are NOT getting planted. After being on the phone extensively the past few days with producers across the country, I am definitely second guessing my original thoughts of 1 to 1.5 million more bean acres going in the ground. In fact I am starting to wonder if we will even reach the USDA's current estimate of 77.3 million acres planted???
Moral of the story, I am becoming more bullish as each day passes. The recent "major" tumble in the US dollar is also reason to move towards a more bullish tilt. Do realize the US dollar has now setback to levels not seen since early-Feb. I know many traditional "Supply & Demand" traders will tell me I am nuts, but when the US dollar first started to stumble (around May 23-24), it was the exact same first time NOV13 beans decided to break out of the upper-end of their trading range at $12.40.
My point is, several stars are starting to move into alignment. Not that they are there as of yet, but certainly moving in that direction (i.e.): bullish production headlines based on weather complications in the US; talk of the Brazilian soybean crop estimates moving lower (CONAB cutting another 200,000MT's from its estimate, now more than 2 million metric tons below the USDA); more bullish technical patterns stirring the interest of trend-following funds; a weakening US dollar fueling thoughts of a more "risk-on" type environment.
Bottom line, bears need to be careful dragging their feet. Yes, "rain makes grain," but remember, "planting in the mud makes the crop a dud.." Click here now fill out the basic information and I will send you my full report.