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Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Soybean prices, especially in the front-end seem to be a little too salty up above $14.00. With China clearly submerged in supply (both from the US and Brazil) and deeply negative crush margins, it's going to be tough for the trade to support prices north of $14 a bushel without some type of NEW weather story or more dire logistical issues coming out of Brazil. Yes, CONAB reduced their soybean production estimate for Brazil down to 85.4 million metric tons (a reduction of 4.6 million and well below the current USDA estimate of 88.5 million). In addition exports were reduced from an estimated 47.7 million metric tons down to 45.3 million. I am just not sure that will be enough to keep the trade supported at these lofty price levels. Keep in mind this is still higher than last years Brazilian production of 81 million metric tons and well above the previous years production of just 66.6 million metric tons. With the Mato Grosso harvest quickly approaching 75% complete; Beans in Brazil moving much more quickly to the ports this year; Concerns about the Chinese economy; Concerns about the Chinese crush margins and nearby over supplies, I am afraid we are going to need a few new wrinkles in the sheets to get NEW bullish interest and money flowing into this market at these levels. I am NOT saying we continue to fall straight out of bed (US supplies still remain tight), but I am starting to think the highs are in place! That is unless some type of MAJOR bullish US weather story hits the wires. Unfortunately, that might take some time to build into a crescendo... Make sure you are adjusting your plan accordingly. There continues to be widespread rumors from Brazil that China is rolling another 10-12 cargoes of soybean sales forward from May and June to July and August. China appears to be doing whatever it can to push supply forward and avoid the negative crush margins and supply indigestion that now prevails. CLICK HERE to receive my daily report.....
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