Soybean producers were given another opportunity to reduce risk as the market traded back near recent highs. The headlines remain the same for the bulls:
- Big-money rotating back inside the commodity space
- Chinese stimulus fueling hot-money and unexpected economic growth
- The U.S. Fed decidedly more dovish than where they started the year
- The U.S. dollar much weaker than where it started the year
- U.S. presidential race creating major uncertainty which could keep the dollar bulls on edge
- Crude Oil posting new highs on the year
- Gold higher on the year
- The Argentine crop experiencing production hiccups and heavy rains seriously delaying harvest
- Politics in Brazil creating more extreme uncertainty
- Palm oil shortage continues to works its way into the headlines
- Record Chinese demand for soy despite the thought of cheaper alternatives creating stiffer competition
- U.S. balance sheet thought to be shrinking as exports and crush now seem underestimated.
As a producer I've been able to reduce a lot of our new-crop production risk on the recent run-up in price. Now I want to wait and see if any of these dominos fall in the right direction before making my next move.
As a spec I'm still targeting the $10.45 to $10.60 area on the chart vs. the JUL16 contract as an area where we need to pay more close attention. Some technicians argue a "back-and-fill" type movement on the charts down to between $9.40 and $9.60 per bushel would be healthy before posting another bullish leg higher.
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