November soybeans have a triple top on the charts near the $14.10 level. Do you see this area being ultimately violated and if so, what would be driving force for a rally to these new highs?
November soybean futures remain range bound between $14.10 overhead resistance and $13.30 support. We feel that for the $14.10 resistance area to be taken out, actual yield talk from producers needs to come in as poor as what many are suspecting.
Should trade start to feel that national yield is less than 40 bpa, then prices should be able to take out $14.10 resistance with $15.00 as the next target higher for the November futures contract.
The 2014 marketing year is now underway. What are your thoughts on marketing 2014 production at these levels?
Pricing any corn at these levels is a tough pill to swallow for any producer. Hope is high for a bounce higher. This might be a year similar to 2009/10 where corn prices trade in a lack luster range, allowing for pricing opportunities only near cost of production levels.
With the ample ending stocks that corn will have, any rally (which would be led by a soybean rally) in the coming weeks or months should be met as a cash pricing opportunity. Same for soybeans: if the market rallies, take advantage and lock in some cash sales. South America is going to be planting another hefty crop which has global end users breathing a sigh of relief, and for now is not providing price incentive for a voracious rally.
At this stage for a major price rally in grains, U.S. soybean yield will need to come in well under 40 bpa or South America will need to have a rough growing season.
The soybean market remains inverted. Do you look for this to continue or will it eventually build a carry into the market?
Like a kid at Christmas, we are all anxiously awaiting to find out what is out in those soybean fields in terms of yield. The only way the current inverted market will revert itself sooner than later, is if US bean yield comes in greater than 42 bpa.
If U.S. yield comes in at 40 or less, then we will likely see an inverted market into January due to low supplies of beans and tight US ending stocks, which will keep nearby markets well supported.
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