Although soybean producers have enjoyed a bit of a price bounce in recent days, they shouldn’t assume that bounce is here to stay, experts tell the “U.S. Farm Report” Marketing Roundtable.
“We’ve seen a little bit of a short covering rally,” explains Ted Seifried, Zaner Ag Hedge. “A lot of it has to do, though, with the fact that we’re bouncing off a key psychological support level at $9, and we were very oversold going into it. You throw a little sprinkle of weather issues on top of that and some fund-buying from outside market concerns, and you get a little bit of a bounce.”
Now, though, the market likely is headed toward a test of prices in the $8 range.
“Sell the rally while you have a chance,” Seifried cautions.
Wet weather has delayed harvest this fall in the Midwest, but drier conditions will remove weather from the rally equation. Additionally, notes Peter Meyer of PIRA Energy, the soybean crop remains huge.
“We’re going to set a bottom sooner or later, but as Ted suggests, that price is going to be below the lows,” Meyer explains. “We may not get there in the November contract. I think we will certainly get there in the January contract, and I think it is going to be a lengthy period of time, December into January, before we can set and bottom the market.”
Click the play button below to watch the complete “U.S. Farm Report” Marketing Roundtable discussion:
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