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Can the current rally can keep its momentum without a U.S. weather story?

Kevin Van Trump, Founder

September 13, 2019

2 Min Read
9.10 money in farming.jpg

The USDA lowered ending stocks by -115 million bushels; rumors circulating that Chinese buyers stepped in and purchased at least 10 cargoes of U.S. soybeans out of the Pacific Northwest; and talk from Washington that deputy-level meetings with the Chinese will happen next week.

The USDA lowered their production estimate by -47 million bushels, with total U.S. production now forecast at 3.633 billion bushels vs. 3.680 billion last month. The USDA also lowered their yield estimate from 48.5 down to 47.9 bushels per acre. Soybean crush and exports for new crop were left unchanged. Old-crop exports were raised higher by +45 million bushels and crush raised higher by +20 million bushels which reduced beginning stocks by -65 million bushels. Net-net, U.S. new-crop ending stocks were lowered by -115 million bushels from 755 million down to 640 million bushels. The U.S. season-average soybean price for 2019/20 is forecast at $8.50 per bushel, up +10 cents. Global soybean ending stocks for 2019/20 are lowered from 101.7 down to 99.19 MMTs as reduced stocks for Argentina and the United States are partly offset by higher stocks for Brazil, Iran, and India.

As a spec, I banked some small profits and remain conservatively bullish. I'm just wondering if the current rally can keep its momentum without a U.S. weather story. I'm still not seeing any major signs of an early freeze.

As a producer, I remain patient and comfortable waiting on higher prices. From a technical perspective, it seems like there's stiff resistance up between $8.95 and $9.15 per bushel. 

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About the Author(s)

Kevin Van Trump

Founder, Farmdirection.com

Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead. 

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