Sponsored By
Farm Progress

Will volatility support soybean prices as acres rise?Will volatility support soybean prices as acres rise?

Weather and politics have bulls in the soybean market thinking prices may change.

Kevin Van Trump

May 26, 2017

1 Min Read

Soybean bulls have to be extremely nervous as the technical picture turns much darker. The recent close sub-$9.40 per bushel is the first time we've seen prices this low in several months and could open the door for more serious nearby short-side interest.

The bears are pointing to the fact recent rain delays for planting corn may push even more U.S. acres to soybeans. I've been saying for months that U.S. soybean acres in 2017 could end up north of +90 million and for the first time in our history end up larger than planted corn acres...here we are!

The bears are also thinking the USDA's current yield estimate of 48 bushels per acre vs. 52.1 bushels per acre last year is perhaps a bit too conservative, especially considering recharged soil moisture levels. We are also seeing more plentiful supply being made available out of South America.

It's also worth noting that geopolitical tensions are continuing to heat up in Brazil as the government has now deployed military troops to help control demonstrations because police forces are being overwhelmed by tens of thousands of protesters seeking current president Michael Temer's resignation and request for early elections. I've also heard reports and headlines that Brazilian police officers recently opened fire with live ammunition during clashes with protesters.

Bottom-line, the problems in Brazil seem to only be escalating and their currency may have to endure another leg lower in valuation, which nearby would bring bearish headwinds to the soybean market. Lets also keep in mind that crude oil prices were under heavy pressure yesterday and down over -5%, meaning the overall macro space is offering up very little help to the upside.


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. 

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like