Soybean bulls continue to talk about a late-planted crop and overall lack of maturity. Yield is being heavily debated inside the trade. Bulls are talking about a sub-46 bushel per acre yield while bears are talking about a +48-bushel yield.
The USDA most recently estimated the yield at 48.5 bushels per acre and total U.S. production at 3.680 billion bushels. FC Stone is now estimating the yield at 48.3 bushels per acre and total production at 3.661 billion bushels. Back in early-August, I believe they had the yield forecast at 47.2 bushels per acre and total production at 3.743 billion. I suspect they are simply seeing fewer acres. Allendale, another respected firm, released their farmer-based survey with a yield estimate of 46.1 bushels per acre and total U.S. production of 3.499 billion bushels.
The problem is we continue to face many demand headlines. Not only do we have the continued uncertainty with Chinese trade, but we have the ongoing demand headwinds associated with African Swine Fever. From what I heard yesterday, China FAS dropped their soy import estimate to 80 MMTs, the lowest in several years, which is -5 MMTS below the current USDA estimate. Meal demand is also forecast at a multi-year low.
Technically, soybeans are coming off their highest close in a couple of weeks and looking at much stiffer resistance in the $8.80 to $9.20 range. As a spec, I continue to hold my small bullish position that's averaged in the low-$8.60's.
South American supplies are starting to be becoming much more limited and we could soon start digesting more South American weather headlines. As I've been saying for months, once South American supplies are more limited, Q4 of 2019 or perhaps Q1 of 2020 will hopefully offer a much better pricing window for cash soybean sales. Staying patient... continuing to keep my eye on weather and Washington!
The opinions of Kevin Van Trump are not necessarily those of Corn and Soybean Digest or Farm Progress.
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