Farm Progress

Soybean traders are a bit confused as updated USDA data painted a more bearish picture, yet prices show no regard.

Kevin Van Trump, Founder

February 13, 2018

1 Min Read
fotokostic/iStock/ThinkStock

In case you missed the headlines, U.S. ending stocks pushed to a whopping 530 million bushels, as the USDA lowered U.S. export by 60 million bushels.

In South America, the USDA raised Brazilian production from 110 to 112 MMTs. At the same time, they lowered Argentine production from 56 to 54 MMTs. The trade obviously believes the Argentine production number is much lower, perhaps falling to around 50 MMTs. The USDA adjustments put the global soybean carryout at an extremely large 98.14 MMTs and the global stocks-to-use ratio remains at burdensome levels.

From a technical perspective, the nearby MAR18 contract is going to run into stiff resistance up between $9.95 and $10.05. The new-crop NOV18 contract looks like it could run into much heavier resistance up between $10.10 and $10.25 per bushel.

My next price target for new-crop is up near $10.30, I'm going to be watching very closely how the trade responds the next several sessions. If you remember, I had a resting order in the market at $10.25 vs. the NOV18 contract early last summer to price some estimated 2018 production. I tried to get cute, moved my price order as we were rallying and bumped the sale to $10.30. The market traded all the way up to $10.28^6 on July 12th then proceeded to tumble all the way down to $9.39 just a month later. I never got filled on that $10.30 order. If I would have just left the price order at $10.25 I would have been filled three cents from the highs. I haven't forgotten... and do not want to let another opportunity slip away. I'm paying extremely close attention!

Get daily market insight from The Van Trump Report.

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. 

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like