Soybean bulls want to contend that global demand is improving to some degree and that most all of the bearish news has now been factored into the current price. Meaning, the trade is well aware of the fact the U.S. yield is now much better than anticipated a few months back, possibly even record setting; that Brazil is going to role out another record number of soybean acres (perhaps harvesting over 100 MMTs in 2016) based on the currency devaluation vs. the U.S. dollar; and that Chinese demand growth may stall if the economy continues to stagnate.
Moral of the story, none of these bearish factors are "unknowns." The cards have clearly been flipped over and made available and aware to the entire trade. Remember, we still have a massive El Niño brewing and weather conditions in South America could quickly shift in late 2015 and early 2016. We also have Chinese soybean import totals for September at a record high for the month of 7.26 million tons, more than a +40% increase over last year. In other words, it's tough to believe the bears when they're talking about wavering Chinese demand for soybeans. Yes, total Chinese imports for all goods shrank by -20% year-over-year, but it obviously had no nearby impact on soybeans.
As a producer who needs to eliminate more nearby and longer-term risk, I'm going to continue gambling on more upside despite the obviously bearish fundamental cards that have already been turned over. For those who want to play the game from the bullish side, make certain you understand you're betting on somewhat of an "unknown." The traditional fundamentalists are painting a picture that includes more burdensome supply in the months ahead. Obviously the 2016 crops still have to be grown, harvested and transported, so time will tell.