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RSS By: Kevin Van Trump, AgWeb.com

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

Soybeans May Be More Bullish Than Everyone Thinks!

Sep 24, 2010

 

Soybeans May Be More Bullish Than Everyone Thinks!
I released this information today before the open in our Free Daily Report. Be sure you get signed up below there is NO Cost or obligation.
 
Things are starting to change rapidly in the bean market and you need to take note of the recent developments. Yes we are still hearing reports of larger than anticipated yields in most areas, but some are seeing more problems than we originally may have anticipated.  In addition there are several other recent possible game changing events gaining hold in the market. 
 
The latest turn of events may have came yesterday when Informa reduced their estimated 2010 US soy acreage down by 1.4 million acres from the USDA’s current projection. This sharp of a reduction coming from Informa is very unusual at this point in the game, and has me extremely concerned. If these numbers are even close to accurate, regardless of higher yields, the US soy stocks situation in 2011 could tighten dramatically.
 
We have also pushed back planting by more than three weeks in central Brazil on continued dry weather patterns. As I mentioned in the South America report, this will not necessarily hurt yields, but it will put continued added pressure on US the ending stocks as South American beans will be delayed at least by a month in later parts of next year. I am not even going to get into the whole La Nina weather concerns, but if South America does see continued dry spells you may see yields start to be affected.  
 
Soybean stocks at the mills are now at 42 million vs 45 million last year. Some of the big boys think that the reduction in milling stocks may force the USDA to estimate lower ending stocks in the September 30th report. If this happens it could cause the bean markets to jump even higher. 
 
On the demand side of things all reports indicate that China now needs to buy about 10 million bushels a week in the world market to meet their needs. Weekly US export sales are up 4% from a year ago. 
 
Trade Strategy: Those of you looking for an alternative play may want to consider building a long position in Soybean Oil. Sources have recently told me that our oil stocks are now at 3.3 million, and have declined significantly since July. In other reports I have read that implied US domestic August soyoil use is actually up about 5% from last year. I have also heard that world biofuel demand will grow by well over 3 million metric tonnes next year. Total world demand for oils and fats right now is up over 7 million metric tonnes and production is reportedly up only 6 million. On the flip side I think Soymeal may start to weaken. I like getting long Soybean Oil and spreading it off against the Meal. 
 
If you are looking for specific strategies or ways you can improve your marketing efforts, be sure and sign-up for our FREE Daily Ag Hedge Newsletter. Each report is jammed pack full of market commentary and daily market strategies direct from the trading floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques.

 

 

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