Soybean bulls continue to look at weather uncertainties in South America and perhaps larger production problems in Argentina. Several sources are now talking about the Argentina crop perhaps falling to between 50 and 52 MMTs vs. the USDA's most recent estimate of 56 MMTs. This could ultimately mean their production might lower close to 10% from their recent 5-year average.
From a technical perspective, the new-cropNOV18 contract continues to look at stiff resistance up between $10.15 and $10.25 per bushel. The front-end of the trade is seeing a bit more nearby psychological resistance in closing above the $10 level.
As a producer, I'm essentially sold-out of old-crop supply and focusing my attention on reducing new-crop production risk. I would like to see theNOV18 contract retest the most recent high up near $10.25 per bushel before I pull the trigger on additional sales. I'm also keeping a close eye on the NOV19 contract, which is again trading up near $10 per bushel. I still believe best practice is to reward the rallies and reduce a small portion of our future price risk when given the opportunity at profitable levels.
As a spec, I remain on the sideline, being respectful to the recent bullish move higher but not wanting to be a buyer into this rally.