April 29, 2016
Soybean producers were given another opportunity to reduce risk as the market traded back near recent highs. The headlines remain the same for the bulls:
Big-money rotating back inside the commodity space
Chinese stimulus fueling hot-money and unexpected economic growth
The U.S. Fed decidedly more dovish than where they started the year
The U.S. dollar much weaker than where it started the year
U.S. presidential race creating major uncertainty which could keep the dollar bulls on edge
Crude Oil posting new highs on the year
Gold higher on the year
The Argentine crop experiencing production hiccups and heavy rains seriously delaying harvest
Politics in Brazil creating more extreme uncertainty
Palm oil shortage continues to works its way into the headlines
Record Chinese demand for soy despite the thought of cheaper alternatives creating stiffer competition
U.S. balance sheet thought to be shrinking as exports and crush now seem underestimated.
As a producer I've been able to reduce a lot of our new-crop production risk on the recent run-up in price. Now I want to wait and see if any of these dominos fall in the right direction before making my next move.
As a spec I'm still targeting the $10.45 to $10.60 area on the chart vs. the JUL16 contract as an area where we need to pay more close attention. Some technicians argue a "back-and-fill" type movement on the charts down to between $9.40 and $9.60 per bushel would be healthy before posting another bullish leg higher.
About the Author(s)
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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