Soybean bulls are pointing to Hurricane Florence, which has been upgraded to a CAT 4, and is expected to hit areas of North and South Carolina and parts of Virginia later this week. North and South Carolina combined are thought to producer just over 75 million bushels of soybeans. Throw Virginia into the mix and we are talking more like a combined 100 million bushels. This is certainly not a huge number, but with fresh bullish headlines limited, it's getting some play.I suspect if the storm system gets pinned down somehow over the eastern portion of the belt it could certainly complicate harvest and put more acres in limbo.

Bulls are also talking about one of the main soybean growing regions in China experiencing some complications due to an early-frost. Bears argue that the bulls are now grasping at straws as they find themselves drowning in a continued sea of bearish headlines.

Most sources inside the trade are expecting the USDA to raise their current yield estimate of 51.6 even higher, probably north of 52 bushels per acre, perhaps even closer to 53 bushels per acre. The finishing weather has just been overly cooperative in many large production areas, normal temperatures with above normal moisture. These means most sources are also looking for U.S. domestic ending stocks to push higher as well, from a massively bearish 785 million bushels, to perhaps a mind numbing 900 million bushels.

Most also suspect to see global ending stocks pushing slightly higher as well. I can argue the bright spot is the fact everyone is leaning over the bearish side of the boat, suspecting another wave of bearish data. How the market actually reacts and digests the data will be interesting? I suspect an initial knee-jerk to the downside. From there however we might actually rally as bears bank profits and buyback positions thinking the worst is over and there's not be much meat left on the bone. I just don't think the bulls can keep the momentum moving higher without the short-side covering. Hence, if I'm buying the break, I'm only looking to be a short-term player. I still think there's another leg lower... 

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

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