Soybean traders are starting to ask questions like some in the corn crowd: Have soybean prices now fallen to low enough levels? I've been saying for weeks I thought we would trade down into the $9.40 to $9.50 range before we found more solid footing and stable ground.
There is some more serious talk about weather complications up north and what appears to be more robust Chinese buying on the break. So maybe we start to stabilize a bit earlier than I previously thought. I'm certainly not saying the bottom is in place, but the bears might need a chance to come up for air, take a few more deep breaths, and hold their nose before heading back down to search for new lows.
As a producer I see nothing wrong starting to unwind a very small portion of your remaining short hedges. The break has paid huge dividends and there is absolutely no need to get overly greedy. Best practice appears to be banking a small percentage of your profits and patiently waiting for any type of rally to make additional cash sales or re-enter short side hedges. I am still NOT a fan of re-owning at this juncture! Unfortunately, I do not believe the downside ride is completely over. In fact I suspect this roller-coaster ride somehow takes us back up a small hill in order to gain a bit more momentum to make the final plunge lower towards $8 in late 2014 or early 2015.
USDA Soybean Data Highlights:
- US Soybean yield raised from 45.4 to 46.6 bushels per acre. US soybean yield is now estimated to be 2.6 bushels per acre higher than the previous record of 44.0 bushels per acre set back in 2009.
- US Soybean production is raised to a NEW record of 3.913 billion. USDA increased new-crop soybean production by 87 million but only increased demand by 42 million bushels.
- US Soybean ending stocks now taken to 475 million bushels.
- World estimated Soybean production raised form 304.60 to 311.13. 2015 world ending stocks raised to 90.2 MMTs, well above expectations.
- Argentine new-crop soybean production estimate raised from 54.00 to 55.00
- Brazilian new-crop soybean production estimate raised from 91.00 to 94.00, while the old-crop is lowered from 87.50 down to 86.50
- Chinese new-crop soybean imports raised from 73.00 to 74.00