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Is a perfect storm brewing for old-crop soybeans?

Is a perfect storm brewing for old-crop soybeans?

Soybean traders are obviously waiting on the release of the USDA data to see just how tight domestic supplies are and just how much "price rationing" still has to be done.  Traders are also keeping a close eye heavy rains in Argentina, which some are speculating could delay harvest in several key locations.  There is also some talk circulating that labor disputes and strikes in Argentina might soon start hitting the headlines. Don't forget inflation there is running sky-high and laborers and union workers are demanding that wages keep pace.  This is just a vicious cycle right now and certainly not one conducive for smooth exports.  Keep your eye on it!  Going into the USDA report this morning, this is what we are looking at.... 

  • US Soybean Ending Stocks (old-crop) currently estimated at 145 million bushels and most expecting it to fall by 5 million bushels.
    • Exports currently estimated at 1.530 billion bushels. With 21 weeks left in the marketing year we have already exported about 1.518 billion bushels. The trade seems to be thinking the USDA will make another 25 to 30 million bushel increase.
    • Imports currently estimated at 35 million bushels. Trade thinking we could see a 10-15 million bushel increase to 50 million.  Ultimately this number could push to levels north of 70 million. 
    • Crush currently estimated at 1.69 billion. Trade thinking we could see a 5-10 million bushel reduction in crush.
  • South American Soybean Production
    • Brazil currently estimated at 88.5 MMTs. Most in the trade seem to be looking for the USDA to reduce their estimate by 500,000 to 1 million metric tons.
    • Argentina currently estimated at 54.0 MMTs. Most in the trade thinking the Argentine croup will remain "unchanged" for the time being. Still only 10-15% harvested.

 Click Here for my Daily report......


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