Soybean bulls are happy to see the USDA finally reducing their crop-condition estimate. Prices were up double-digits in the overnight, but continue to trade around the $9.00 level.
Weekly ratings fell from 70% rated "Good-to-Excellent" last week down to 67% this week. States deteriorating the most are: North Dakota -9%; North Carolina -8%; Missouri -6%; Kentucky and Mississippi -5%; South Dakota -4%; Iowa and Tennessee -3%; Minnesota and Nebraska -1%; Illinois, Kansas and Louisiana "unchanged"; Indiana and Wisconsin +1%; Arkansas +2%; Michigan +3%; Ohio +7%.
Soybeans "blooming" are reported at 92% vs. the 5-year average of 86%. Soybeans "setting pods" were reported at 75% vs. the 5-year average of 58%.
From a historical perspective, I don't like reading that NOV soybeans tend to deteriorate in price from now through early-October. I'm hoping this year bucks the trend. I suspect a lot will depend on remaining August weather and how Chinese trade talks progress in Washington. I still see more extreme volatility on the horizon.
Many professional traders still see an easy -$1.00 move to the downside on further deterioration in Chinese trade talks and a cooperative U.S. weather. On the flip side, many professional bulls are talking about +$1.00 immediately added to the upside should trade talks produce an agreement and or U.S. weather deteriorates more rapidly in the weeks ahead. Bottom-line, nobody really knows the direction of the next $1.00 move in this market, but traders continue to believe the wild swings are still in play.