Could This Be Market High in Soybeans?

May 13, 2016 12:00 PM

The USDA reports released this week were bullish on soybeans, but according to Chip Flory and Brian Grete on the Pro Farmer Profit Briefing, a portion of the report indicated potential for downward price pressure ahead.

“We got the planted acreage numbers we expected,” Flory says. “The surprise came on the demand side.”

Flory says there was a much bigger usage estimate than most people anticipated on the report, which resulted in a new-crop carryover estimates 100 million bushels lower than the trade expected.

The question now, according to Grete, is whether or not the market can sustain that usage pace, particularly at these higher price levels.

Flory says no, based on USDA’s own price estimates.

“The price range USDA reported was $8.35 to $9.85,” Flory explains. “While that is a wide range, the midpoint is $9.10, so all that demand is based on $9.10.”

Grete agrees those numbers could indicate downward price movement for soybeans in the future. “You look at where we are at price-wise,” he explains. “Even with a wide basis, you’re above $9.10, so that suggests USDA sees a period of lower prices moving forward.”

Watch the full Profit Briefing below:

Want more video news? Watch it on AgDay.
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Spell Check

Seattle, WA
5/13/2016 06:31 PM

  I am from Brasil. Brasilian and Argentinas soybean crops are lower than USDA estimates. With next report i expect lower harvest and another rally

Lem, AL
5/20/2016 09:06 AM

  Hello , I'm from Brazil ... production does not exceed 31 bushels per acre.

Soybean Farmer
Hardwick, MN
5/13/2016 12:26 PM

  The lies that drove down the grain market prices over the past few months and the news saying there was no reason for the grain prices to go higher have now been corrected with the South American harvest and US export. Farmers lost a lot of money selling their crops at the lower prices because of them lies.


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