For the second time this year, a soybean rally has caught producers off guard. This rally is said to be similar to the rally in March 2015. In terms of the world market, U.S. soybeans have been “quite competitive,” according to Matt Bennett of Bennett Consulting.
The demand for U.S. soybeans in China has been strong, despite the country making the decision to increase soybean acres over the next five years. Bennett believes if South America produces a large crop in the spring, U.S. exports might not stay as strong throughout 2017.
“Just be a little bit cautious,” said Bennett on U.S. Farm Report.
To Don Roose of U.S. Commodities, this rally is adding “some risk premium to the market,” comparing it to a rally in March when there were weather problems in South America.
With planting season soon coming to an end in South America, U.S. farmers have been keeping a watchful eye to their neighbors in the south. Don Roose of U.S. Commodities said when the latest production estimate is published on Nov. 9, he believes it will raise at least half a bushel on soybeans, allowing a carry of $450 million or more.
“If South America has some issues, [a gap will] show up again,” said Roose. “It depends on demand.”
Watch Roose and Bennett discuss livestock markets as well as soybean demand above.