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Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Fears of an early freeze or even a regular freeze having a greater impact on soybean yields than corn yields, In fact many analyst are now estimating that even a normal dated freeze could put 15-20% of the US soybean crop in some type of yield jeopardy, simply due to the late-planting, lack of sunlight and cool temps that have prevailed this growing season. What I find ironic however is the fact soybean conditions as of RIGHT NOW actually rank much better than corn on a historical scale. Meaning it all hinges on rainfall and temps during the next few weeks, and without damage to the crop I see it highly unlikely that beans can maintain their premium. With the corn/soybean ratio pushing to more extreme highs (2.7:1 yesterday) many specs might be feeling the pain. For what it is worth, I heard reports circulating that the all-time highs in this spread were set back in the fall of 2009 at about a $3.70 premium to the bean side of the equation (vs. 2 DEC corn contracts). As of this morning we seem to be correcting a touch, but I would continue to except extreme volatility over the next few weeks. A couple of things to keep an eye today: Argentine workers at soybean crushing facilities are expected to go on a one-day strike. Shouldn't be a major issue unless it turns into something more pressing; let’s also keep our eye on the Chinese weather situation where extreme heat, flooding, and now a Typhoon are forecast.
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