Bulls continue to talk about U.S. production estimates pulling back. The recent forecast for heavy snow in parts of the upper Midwest and delays out East are cause for some concern. Bulls also point to logistical restraints and problems in South America, especially if they are going to be forced to supply China with most of their soybeans. Bulls also point to a significant reduction in Chinese and global corn stocks.
Bears see the same shrinking of the global balance sheet but deem supply to be ample or adequate not to create a shortage. Bears are also banking on a big jump in South American production compared to last year. The verdict is obviously still out on that call, as the weather will play a huge role as the season progresses.
Bears also seem to be punching a few holes in what has been an extremely strong demand growth story. The U.S. exporters are perhaps seeing more than expected competition from Argentina, Brazil and Ukraine.
Longer-term, weather becomes a huge "wild-card" and could create upside momentum. But from my perspective, that's still way off in the horizon.