Soybean bulls are worried about the fact many U.S. processors are going to reduce runtimes or in some cases completely shutdown during the April-May time period. This has those without meal coverage somewhat scrambling to make certain they have needed supplies. On the opposite side of the debate we still have the worlds #1 buyer of soybeans, China desperately trying to cancel, roll or re-sell cargoes of income supply.
South American Crop
The bulls are starting to backpedal a bit in regard to total Brazilian and Argentine soybean production. There is some talk that Argentine production could be close to 54 MMTs and the Brazilian crop now back closer to 88 MMTs, perhaps even a bit higher. Essentially meaning the USDA will NOT need to lower their estimates Keep in mind there is now talk floating around that second soybean acres jumped in Brazil from just under 325,000 acres last year to more than 1.84 million acres this year. WOW!
Many of the bulls have been thinking the March 1 soybean stocks were going to end up below last year for a couple of months now... it looks like Monday will be the day of reckoning.
The USDA Ag Outlook has the 2014 new-crop soybean acres estimated at 79.5 million. The trade is thinking that number is more like 81.2 million, which would obviously be a NEW record. Many of the longer-term bears are thinking total U.S. soybean planted acreage could ultimately end up even higher at between 83 and 85 million, especially if producers get in a jam and start running out of time to get the corn in the ground. I am NOT in this camp and tend to believe at most, we see an additional 4-5 million acres when compared to last year, when we planted 76.533 million soybean acres. Remember, with the wheat crop being so late, you might have a tough time getting the normal number of second-crop soybean acres in the ground.