Soybean bulls are talking about the fact many private analysts have recently pulled back their estimate for Brazilian production. It seems that many of them got a bit too optimistic and were projecting Brazil's production to be north of 101-102 MMTs. The USDA is has been at 100 MMTs and the others are starting to come back down to their levels. In fact, CONAB, just yesterday, reduced their estimate from just north of 101 MMTs down to just under 99 MMTs.
The problem is we are still talking about Brazil harvesting another round of record production. The bulls are also happy to see better than expected export sales.
There's some debate among many inside the trade about how the USDA will play their cards next Tuesday when they release the April supply & demand report. The bulls think the USDA could trim ending stock estimates on improved export sales, while the bears believe the number will be moving higher.
Technically, many traders are keeping a close eye on the $9 level vs. the contract. There's talk that a close below that level could re-open the door to the downside. As a producer I'm staying patient right now with hedges in place and hoping for higher prices in order to make some additional cash-sales.
As a spec, the traditional fundamentals continue to tell me to be short, but the true action of the market is keeping me uncertain and on the sideline. Don't forget: The trade is eager to see Monday's Malaysian Palm Oil report, updated USDA numbers and Friday's latest NOPA data.
Next week could be a wild one for soybean prices.