How will Soybeans Act at $10?
Jul 06, 2017
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Soybeans have rallied almost 80 cents since last Thursday and have posted new highs over the last 4 months. The condition of the soybean crop has declined in both of the last two crop progress reports and is becoming a concern. As November beans approach the key $10.00 mark the question is where do they go from here?
An 80 cent rally in the soybean market is impressive in a year where we planted a record amount of soybean acres. The record acres do give a healthy cushion to this soybean crop but after a soggy planting season followed by a warmer dryer pattern in some areas have raised concerns about the condition of this soybean crop. While I will argue that it is too early to begin to make yield estimates at this point in the year soybeans may have an uphill battle to trendline yield.
In the last two weeks soybean conditions have declined from 67% good to excellent to 66% to now 64%. This compares to 70% good to excellent last year. While the conditions are not terrible the declining trend is troubling especially for South Dakota at 23% poor to very poor, North Dakota at 17% poor to very poor, and Indiana at 13% poor to very poor. These are large growing areas for soybeans that may continue to see stress unless the weather pattern sees a significant change.
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Weather and conditionswill have to be watched closely going forward. In most years soybeans make it back to best their February average price which this year is just shy of $10.20. It seems that this may be the opportunity for that to happen, but if it does and then weather turns more normal in the key time frame of late July through early September then this move couldproduce a summer high for soybeans. Producers should be watching and looking for marketingopportunities. There are strategies to keep the upside open which can help producers make sales without risking opportunity.
Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action. Ted Seifried - (312) 277-0113. Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.Follow me on twitter @thetedspread if you like.
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DecemberCorn Daily chart:
NovemberSoybeans Daily chart:
Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.
In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!
Ted Seifried (312) 277-0113 or firstname.lastname@example.org
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