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Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Soy bulls continue to consider tight US supplies, strong export inspections and now an extended forecast for parts of South America that is trending a bit drier. Technically, bulls are excited as well, as the MAR14 contract has now moved back above its 200-Day Moving Average. Net-net, as long as the word "cancelation" isn't spoken by the Chinese, I suspect the trade could continue to work itself higher, at least near term. My final price targets just north of $13.50 are still in place and I remain hopeful that we can still see a 4th quarter, late game comeback, especially if meal and the bull-spreads can lead the marching band. Just keep in mind the Chinese Lunar New Year comes 10 days earlier than last year and will begin on January 31. Last years data shows that the cancellations started 10 days prior to the holiday, and continued through the following week, with net reductions of 109,200MT and 119,500MT, respectively for two weeks. If the same type of scenario plays out we could see the "cancellation" word hit the headlines at the beginning of next week. At the same time, we could see the the South American harvest hit full-stride and soybean crop estimates coming in much larger than the 89 million metric tons currently projected by the USDA. Talk in the trade is that the 90 million metric tons could be conservative and a number north of 92 million metric tons could eventually come to fruition. Bottom-line, the bean market feels like there is still some room left to the upside, but once we run out of momentum it could get ugly in a hurry. Just remember, being the last one out of the room could be a costly venture. Don't get too greedy! Click here for my daily report....
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