Attitudes Remain Highly Bullish in the Soybean Market

March 26, 2012

By: Brian Grete, Pro Farmer Senior Market Analyst

What Traders are Talking About:

* Soybeans continue to rally. After the corrective pullback early last week, buyers have actively returned to the soybean market and futures are attempting to extend the rally from the winter lows. Fundamentally, crop concerns in South America are getting much of the credit for the price strength. Private consulting firm AgRural cut its Brazilian bean crop estimate by 1.9% from last month to 66.68 MMT due to persistent dryness in southern and northeastern growing regions. But a forecast from an Oil World analyst calling for futures to hit $14 "soon" and to rally to $14 to $15 (or higher) "in the next four to eight weeks" is also supportive.

The long and short of it: Soybean traders are responding to every bit of bullish news. That's a clear sign attitudes are are very bullish.

* Cattle on Feed Report slightly negative. Last Friday's Cattle on Feed Report showed On Feed at 103%, Placements at 103% and Marketings at 98% of year-ago. All three categories came in on the negative side of the average, pre-report guesses. As a result, the report data is likely to weigh on live cattle futures this morning. But there was nothing in the data that should draw an extended (or sharp) negative price reaction, especially since futures dropped hard into the report.

The long and short of it: After the initial wave of selling pressure has faded, traders will turn their attention to boxed beef trade as they watch for signs of a short-term low in the product and cash markets.

* Email ties Corzine to missing MF Global funds. A congressional committee investigating how $1.6 billion of customer funds went missing from MF Global said Friday that they now have evidence that former CEO Jon Corzine gave "direct instructions" to a senior official to use $200 million worth of those funds that were to have been untouched. The source of the revelation is an email from Edith O’Brien, the assistant treasurer. The House Financial Services subcommittee holding the hearing Wednesday has subpoenaed O’Brien to testify and this would appear to bring into question statements that Corzine has made that he did not intend to have any customer funds transferred.

The long and short of it: While the trail of evidence seems to be pointing more toward Corzine, the real outcome for those involved is how much of their missing funds will be recouped.