December 17, 2016
Soybean producers are seriously considering the opportunity to reduce more new-crop price risk. I personally reduced a bit more long-term exposure up near $10.20 per bushel vs. the NOV17 contract and now have about 40% of my estimated 2017 price production risk removed at profitable levels.
Demand seemed a bit mixed yesterday as the NOPA number was strong but not record large, actually below what most had been anticipating, at 160.752 million bushels down considerably from 164.641 million in October and down vs. the average analyst estimate of 162.568 million.
On the flip side weekly export sales were once again north of +2.0 MMTs and well above most all insider estimates. China was again in the U.S. market looking for additional supply. Technically the new-crop NOV17 contract seems to be looking at fairly stiff resistance up between $10.40 and $10.50 per bushel.
To the downside it feels like nearby support is somewhere between $9.75 and $10.00 per bushel. A close below $9.75 would obviously se the stage for a much deeper setback. The old-crop MAR17 contract is looking at resistance up between $10.60 and $10.80 per bushel.
As a producer, I cognate to like the thought of reducing more long-term price risk while being offered profitable returns. As a spec I remain on the sideline.
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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