Soybean meal has been leading the soybean rally by increasing in value by 25 percent in 60 days.
“It’s been what I call a displacement rally—that is Argentina’s had some drier weather concerns so there is a concern about their crop size,” said Bryan Doherty of Stewart-Peterson on AgDay. “The market quickly reflects on the idea that Argentina is the largest exporter of soymeal in the world.”
Doherty says this rally has been both a short cover rally and a fund buying rally in addition to the meal displacement rally.
February numbers from the USDA show the U.S. soybean carryout numbers are pegged at 60 million bushels and roughly 1 million acres of new crop soybeans, “the downside could be plentiful for beans.”
Hear what Doherty says could happen if things go bearish on AgDay above.