The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Soybeans have added over $0.50 cents to last weeks lows and the market is questioning whether it has enough strength to continue to push further up the price mountain? Most of the bullish fuel is obviously coming from the strong Chinese demand story. With extremely large export sales being reported as of late, most in the trade are thinking the USDA will be forced to increase overall export estimates by another 50-100 million bushels in the December report. There are also rumors circulating that Brazil is no longer offering soybeans for Feb.
On the flip side the bears continue pointing to more longer-term obstacles such as a NEW record South American crop going in the ground, near ideal growing conditions up to this point, and another record US soybean crop going in the ground next season. The only thing really new that I have heard form the bearish camp are rumors that the Chinese Government could be preparing for additional state reserve auctions. To me this only shows demand is extremely strong in China and the government wants to do everything in their power to keep prices from racing higher.
From a technical and historical perspective there is some reason to be excited. Several times in previous years we have seen bean prices rally into Thanksgiving. You will even hear some seasoned veterans of the trade tell you, "The bulls generally feast on Thanksgiving and the bears on Christmas." I am still not ruling out a possible run to $13.50 or perhaps even a shot at filling the technical gap on the charts located in the $13.70's. We may have to ram the front door a few more times before we can break through the heavy resistance but I believe supplies are simply too tight for prices not to move higher, at least short-term, on this type of heavy demand. Click Here for my daily grain comments...
No comments have been posted to this Blog Post