Commentary
A profit collecting driven bounce in the soy and soymeal markets today closed out a volatile week of trading. Beans lost approximately 11 cents on the week, to close at 1172 just above the 10 % down form the year threshold. (1168). While condition ratings continue to drop in Argentina, Brazilian offers into China are still significantly cheaper that US origin. Managed money has pushed out to 138K short, 30K short of the record. From a demand standpoint USDA is bearish and I’m citing the January WASDE and AG Forum reports released yesterday. USDA for new crop beans came out with a carryout forecast of 435 million bushels far exceeding last week’s WASDE at 315 for old crop. Yield forecast at 52 million bushels on an increase in acres. Current conditions haven’t proven price supportive especially as China has cancelled some cargoes in the few weeks. NOPA January crush came up short of expectations and weekly export sales fell below recent averages to boot yesterday. Beans like corn and wheat need a story and for now, unless something unforeseen enters into the market, doesn’t have one near term. That said, if this warm winter is any indication of how hot this Summer could get, things could get really interesting in the Midwest come July.
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Sean Lusk
Vice President Commercial Hedging Division
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