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Soybean Tips |
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Soybeans
- Just as in corn, the whiplash factor must have been huge in
Chicago and around the country today when traders saw the USDA’s
planted acres number for soybeans. With so many private analysts
looking for a million or even two million acre increase in soybean
plantings due to switching from corn, the decrease was a shock.
Today’s planted acres represent an actual decrease of 33,000 acres
from the March release and is 600,000 acres below the June S&D
report of 16 days ago. The reaction of the trade to any report is
gauged by the difference it holds from the trade’s expectations.
Today’s difference was a huge million acres.
With today’s June 1 stocks report also coming in at the bottom end
of the range of trade guesses, the bullish potential was big. This
release brings to the forefront the possibility of very short
carryout by the time we get to August of ‘03. Thus, the double digit
gains in the bean market today.
Reportedly there was heavy hedging on the part of South American soy
producers in Chicago today. Regardless of our decreased production
prospects, they are still sitting on a record crop. And it is a crop
for which sales are running behind the normal pace. With all of the
economic problems, there will still be a fair amount of South
American beans available for sale this fall at the time that we (US)
will normally have the world market to ourselves.
China did actually make the US soybean sales ledger this week with a
55,000 tonne purchase. Additionally, the Chinese are making noise
like they are going to reformulate their intentions to drastically
slow soybean purchases. Whether they do or do not remains to be
seen, but it is an issue to be watched.
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