Soybean bulls continue to push the market. In the past two weeks, following the tariff threats from China, the JUL18 contract has gained over +70 cents. The new-crop NOV18prices have gained over +50 cents.
Headlines most recently show Argentina buying soybeans from both Brazil and the U.S. The USDA also reported the U.S. weekly export numbers stronger than most had expected. It appears the current old-crop U.S. export estimate is now safe and will not be lowered like many had anticipated.
The bids in Brazil have cooled off a bit, but if they pick back up I have to imagine U.S. export estimates will start to push higher. With the USDA forecasting Argentine exports at 18-year lows, it's tough to imagine any other solution. Keep in mind the USDA has already pushed their domestic crush estimate to a record high 1.97 billion bushels. Throw on top the USDA forecast -1.2 million fewer soybean acres and we have a bullish recipe.
I should also note, the funds are thought to be long about +200,000 contracts. Even though I'm a believer in the story, I'm just worried we might be close to "all-in" for the moment. Meaning who else is going to come into this market as an aggressive bull? Everyone that's currently in on the long side of the market knows the story and the headlines.
The next big bull story that would attract new bulls is probably a U.S. weather hiccup. Between now and then, however, we have a bit of time. I'm nervous that some of the weaker bulls might get a bit bored, especially if we find a few more U.S. acres and the Brazilian crop keeps getting a bit larger. I just can't be a buyer at the high-end of the recent range.
Yes, I think price can ultimately go higher, especially late-summer or early-fall, but between now and then this market could get extremely wild. As a producer, I want to be in a very comfortable position so I don't have to psychologically feel the pain if it occurs.