$12 Soybeans: Now or Later?
Watch the funds for clues.
Bryce Knorr
Published: May 11, 2009
The rally in the soybean market hasn't piqued the interest of the popular business press, which remains focused on stress tests and the Dow. But beans are on a roll, attracting more fund investment while scoring a breakout last week on the nearby chart.
In the short term, the rally's propulsion could depend on Tuesday's USDA report, and whether the trade believes the government's assessment of how tight 2008 crop stocks could get by Sept. 1. The bottom line in my forecasting models keeps dropping like a rock. Farm Futures official guess for Tuesday's report, released to the wire services, is 120 million bushels, and it could go lower: The current number on my spreadsheet is just 88 million.
In addition, traders will also look at USDA forecast for Argentine production, which could be cut by 200 million bushels. The final piece of the puzzle comes from China, and just how aggressive the world's largest importer is in canceling sales. Some washouts are typical, but if the trickle becomes a flood it could signal an end to the rally.
To read Bryce Knorr's complete weekly soybean review, click HERE.
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Tagged: usda, soybean, farm, farm futures, farmfutures
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