Farm Progress

Thoughts on making sales into bean rally

Kevin Van Trump

September 20, 2016

2 Min Read

Soybeans are again trading higher this morning after closing above some key technical levels yesterday afternoon.

The Chinese crush margins are some of the best we've seen since early-Spring and the bulls are hoping to see continued strength in demand from the Asian giant. U.S. weather remains a bit wet and the harvest has already fallen behind it's normal pace.

From a technical perspective, the NOV17 contract is starting to run into an area between $9.80 and $10.20 that has caused some difficulty in weeks past. We also have to keep in mind we've added close to +40 cents from last weeks low and we are on the midst of harvesting our largest crop ever...perhaps the market is trying to tell us something?

The USDA reported yesterday that the US. harvest is currently about 4 percent complete vs. 6 percent last year vs. 5 percent on average. Interesting to note, back in 2012 we had over 20 percent harvested by this date.

Bottom-line, all of the major producing states are running behind their traditional average historical pace. Crop conditions were left "unchanged" at a record 73 percent reported "Good-to-Excellent". Keep in mind Illinois conditions are now 80 percent and Iowa 81 percent "Good-To-Excellent".

As a producer I continue to like the thought of making sales into the rally, especially on all the "overage" that will be harvested.

I personally don't want to be holding or taking risk on any more than 20 percent of my production post-harvest. I'm also keeping an extremely close eye on the NOV17 contract in hopes of getting an opportunity to reduce some longer-term price risk on another leg higher.   READ MORE OF THE VAN TRUMP REPORT HERE

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. 

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