Soybean traders are wanting to see if the USDA makes any adjustment to last year's crop. Most inside the trade see demand as somewhat known with only perhaps a couple of small adjustments. If there's any particular surprise, it would most likely come as an adjustment to last years crop, but I don't really see that happening.
Net-net, I'm thinking the report is mostly a non-event for the soybean market. If I were forced to pick the report being either bullish or bearish, I would pick slightly bullish, with the September 1st soybean stocks number coming in a bit under the average trade estimate.
From a technical perspective, it feels like we've moved from the lower end of the trading range back up to the middle of the trading range. Could we continue to push higher towards the upper end of the trading range, nearer $9.00, certainly. Ultimately however, I still see this market trapped in a nearby trading range until more is known about U.S. and Chinese trade relations and or South American weather. I suspect we could test the higher end of the range and again the lower end of the range, while the market waits patiently for the next major headline.
As a spec, I'm on the sideline, worried that while we remain in an apparent vacuum void of major headlines, the market will be extremely difficult to forecast and equity could be easily chewed up. I am keeping my powder dry, preferring to make a move once we move towards a more extreme portion of the trading range.
As a producer, I remain patient. For those needing to make cash sales nearby, the upper-end of the range makes sense. I will continue to pay close attention to headlines involving Chinese trade negotiations and South American weather. Keep in mind, most are forecasting a +45% jump in Argentine soybean production and another all-time record crop being planted in Brazil.
The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.