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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The opinions of Kevin Van Trump are not necessarily those of Corn and Soybean Digest or Farm Progress.

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