Soybean traders might start to see some "back and fill" type trading activity following the almost $1.50 rally from the recent October low. Obviously many in the trade are wondering if the soy market didn't get a bit ahead of itself, especially in regard to overall demand and U.S. logistical constraints. All of sudden we are seeing Chinese crush margins turn more negative (hence their demand is wavering a bit), and at the same time we see some slight improvements in the U.S. rail situation and more available meal from South American suppliers.
On Monday, the trade will be digesting the NOPA October crush data. From what I've heard, most inside the trade are looking at a number between 155 and 165 million bushels, real close to last year. Remember, crushing plants out East weren't running at full capacity early on as the high moisture levels limited available supply. Outside of demand and U.S. logistical headlines, the trade is also keeping a very close eye on weather complications in Brazil. There seem to be more stressed crops than there are strong crops inside Brazil. I certainly don't have a crystal ball, but I have this hunch the problems in Brazil might be a bit more dire than the trade is yet recognizing.
As a producer I still want to remain patient. Don't be surprised or panicked though if we start to see the trade backpedal a bit as Chinese demand and U.S. rail lose a little sizzle.