Soybeans finished with another gain for a ninth session. I found that surprising, expecting a consolidation more on the negative side than on the positive side. All the more so with wheat finishing down 24.1 for the day, having earlier reached limit down. From the various and varied opinions of analysts, it appears that the support for soybeans is coming from underlying bullish fundamentals. In the shorter term, weather continues to be the major factor, with dry weather in Brazil delaying the planting of next years crop and the continuing idea that hot weather in August has damaged the current crop. This presumably is coming from bad reports from early harvesters. As one farmer from Illinois put it, “On August 1 I thought we had great potential, now it appears that we will have the worst bean crop in 20+ years.”I am always wary of reading too much into the crop comments at AgWeb, however it appears quite possible that the harvest will be as disappointing as the market currently believes it will be. More interesting to me though is the idea that if the harvest is bad, soybeans will still not be as tempting for farmers at their current price level. Soybeans will have to go much higher to make it interesting and worthwhile for farmers who will be thinking that next years crop could be just as low. This makes wheat and corn the safer bet in their eyes. This hadn’t occurred to me previously. This is one of the reasons why I read AgWeb most days. It gives me an insight on what the farmer’s viewpoint and I find that fascinating.
Tomorrow, the USDA will be releasing their weekly export sales. I personally believe it needs to be reasonably high within the expected range of 300,000 to 500,000 metric tons for the price to continue on its move upwards. Last week, it came in at the lower end at 346,500 metric tons. Then again, what do I know, the market will do what the market always does, it sets the price despite whatever I think. I find that reassuring in some ways.
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