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 remain extremely volatile! Yesterday's excitement stemmed from talks that China was trying to buy more US soybeans for late-Feb delivery as they became more concerned about South American weather, basically a couple of potential dry pockets in Brazil and some intense heat brewing near-term in Argentina. On the flip side, the bears are quick to point out that last year at this time the Chinese were busy canceling over 300,000 metric tons of unshipped US soybeans. We also need to recognize the NOPA domestic US crush numbers were not nearly as strong as some had anticipated. In fact rather than meal usage being up by 2-3% in the first quarter of the marketing year (like many bulls had thought) it appears to be somewhat flat. Surprisingly, to me soybean oil usage though was up 15-20% compared to last year. Bottom-line, however, remains the fact several analyst might now be able to start pushing their March 1 quarterly soybean stock numbers higher rather than lower, especially with the strong possibility of the USDA raising their yield estimate in the final January report. This is why I continue to believe, even though old-crop prices may have another push to the upside on tight global supplies and at least one South American weather story, a floor must be in place on ALL remaining unsold soybean bushels. Click here for my daily report...
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