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Soybeans rally at close from exports and short covering


Soybean bulls are rejoicing after seeing the JAN14 contract post its first close above $13.24 since mid- to late September. The strong Chinese demand story seems to be staying alive on confirmation of more U.S. sales by the USDA almost each and every day.

We are also getting a little bullish help as some questions are starting to arise in regard to "weather" in parts of Argentina and even Brazil. Not really any concern regarding the longer-term forecast, but talk is starting to circulate that some delays in planting may now make a substantial amount of early beans out of South America more of a pipe dream than a reality.

Regardless, we have to understand downside price implications could be severe in new-crop as weather forecasters so no real major threat in South America. Meaning, a Brazilian soybean crop north of 90 million metric tons could be a real possibility in 2014. Maybe not a lot of early soybeans, but nonetheless a NEW record crop. Keep in mind this compares to 82 million metric tons produced this past year. 

The El Nino forecast and talks we were hearing whispered last week by a few of the bulls are now no where to be seen. There doesn't seem to be hide nor hair of either El Nino or La Nina. In fact several experts are now thinking sea surface temps out in the Pacific will remain in the "neutral" zone through spring. If this is accurate, South American producers may enjoy more predictable and pleasant growing conditions...

I hate to sound like a broken record, but the risk in soybeans is clearly situated in the deferred contracts, i.e. 2014 and 2015 prices. Make sure you making necessary adjustments and plans. Click here for my daily report...

Update: We pulled the trigger on another cash sale yesterday on the big rally. We now have just 15% of our 2013 production left to price. If you don't have our most recent cash-sale price targets be sure and call the office 816-322-5300 

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