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Soybeans bracing for an extremely volatile week

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A meeting with Chinese officials could send the soybean market into an upward direction.

The USDA is back online, and fresh data will soon start circulating. At the same time, the biggest meeting to date with the Chinese is scheduled to happen Wednesday and Thursday in Washington. The trade has been suspecting positive headlines to come from the event, so a surprise would be something negative or less than anticipated.

South American weather is little changed from late last week and will continue to be closely monitored. Production hiccups in Brazil associated with overly dry conditions continue to trim production estimates. There's also pockets of overly wet conditions in parts of Argentina that have caused some complications.

Despite the bullish optimism coming into this week, as both a producer and a spec, I worry that upside price momentum could be somewhat limited. Certainly, a trade deal or compromise with the Chinese would elicit a knee-jerk to the upside, but I'm curious as to how long that momentum could be sustained? U.S. domestic demand remains strong, but without the Chinese buying U.S. supply in a big way exports will remain disappointing. Yes, total U.S. supply should pullback a bit on a lower yield estimate for this past year’s crop. The bulls also point to fewer U.S. soybean acres being planted in 2019, but that number seems to be growing large as new-crop NOV19 prices trade north of $9.50 per bushel.

From what I understand, the USDA will try and get things back on track by releasing their monthly WASDE report as scheduled on February 8th. So, don’t miss my daily comments by CLICKING HERE

Source: Kevin Van Trump, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.

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