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Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Soybean traders continue to debate if the old-crop puzzle is closer to being solved. I continue to contend as each day passes we are RAPIDLY moving closer to solving the soy balance sheet, especially as I hear more talk about a heavy dose of SAM soybeans making their way further into the US interior (deep into there interior). Back in Dec and Jan I first talked about the US possibly running out of soybeans this summer, but who would have every thought we would be crushing South American soybeans in the middle of the Midwest during the month of May??? New-crop, in my opinion, is starting to become a bit more intriguing. At first glance it appears to be a "bearish" no-brainer, especially with the USDA forecasting 81.493 million planted acres (basically 4 million more than the previous record). Let's just remember, the crop still needs to be grown... and with global demand pushing higher, we are going to need somewhere between a 3.35 and 3.40 billion bushel crop to keep ending supplies at 185 million plus. With that being said, the bulls can argue if harvested acres are 80 million we will need yields of 42 bushels per acre or higher. What I am trying to tell you is if "harvested acres" or "yields" start be more heavily debated the bulls will certainly find a way to justify the need for additional "risk premium." On the flip side, if you believe more than 80 million acres are going to be harvested here in the US and the yields are going to be closer to trend-line at 44-45 bushels per acre, then you have no choice but to be a BIG BEAR and feel as if prices are currently $1.50 to $2.50 too high. The line in the sand is starting to be drawn and the battle waged...the determining factor will obviously be the "weather." CLICK HERE for my daily report...
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