Soybean bears remain up to bat as yet another record South American crop is moved out of the fields and to the ports. Transportation and logistical issues remain a concern in Brazil, but the trade appears to have tired of the story. Perhaps the headlines will re-ignite themselves next week when government officials from Brazil meet with parties representing the truckers.
The truckers hope to show up in masses in the capital city, to again argue that the fuel increases were unjust and should be removed. The government officials have stated the removal of fuel taxes are off the table, which could see the protest spring up again next week.
Most technical and fundamental analysts are in agreement that the spring highs have clearly been posted at around $10.40, and that the bears might now be setting their sights on a run for the fall lows in the $9.20s. The next major focal point will obviously be the USDA's March 31 Planting Report.
The problem is the USDA is currently using an extremely conservative estimate. In fact most sources inside the trade are now thinking the only direction the USDA can go is higher; perhaps 2 to 3 million acres higher.
The other kicker is weather. Right now, any major weather hiccup or delay in corn planting is clearly being digested as meaning more soybean acres as producers are forced to switch. Bottom line: Without the problematic political and labor headlines out of South America and no leverage from the weather at this point, soybean bulls are facing an increasingly tough uphill battle. Crush margins are drastically backpedaling here in the U.S., and South American exporters are clearly starting to get their legs underneath them. As a producer I remain patient, but have mentally prepared myself for a retesting of the fall lows. I will continue to keep ALL hedges in place.