Soybeans remain fundamentally bearish as U.S. planting is reported at 31% complete, and well ahead of the 5-year 20% average. The South American crop is record large and meal demand continues to be questioned. The reason I'm not as extremely bearish the soybean market as many inside the trade is because I believe there are a still a few wild cards that could hit the table. The situation in Argentina might be easily explained by the bears, but I see it as a much more complicated piece of the puzzle.
I'm also worried about the overall big picture in regard to commodities. Have we finally bottomed out? Are the big money managers going to start shifting money back into commodities? Remember, this game has changed dramatically the past few years. As I mentioned in the opening paragraph, if you miss the big macro picture, this game can quickly become a bloody sport. As for me I'm currently uncertain right now about the overall macro landscape. My head is telling me the U.S. dollar goes higher and crude oil pulls back again. But I'm starting to second guess my convictions as some very smart players and some very good arguments now being made that support the opposite side of the bet.
From where I sit, this market in particular is simply too dangerous to be playing guessing games. Unless your absolutely certain about the larger macro landscape I would encourage you to sit this dance out. As I mentioned last week, the traditional fundamentals are easy to read, they are obviously bearish. Unfortunately hitting a few lay-ups isn't going to win the game, in today's world you have to be able to hit the longer ranging 3s. In other words you have to be able to connect all the dots and get the larger money-flow picture correct to win the game. As a producer I'm content on staying patient and waiting for a move back above $10.00. As a spec I like the sideline!