Acreage Fears, Crude Oil Weigh on Soybean Market
Weekly Soybean Review shows that the shine may be sliding off soybeans as spring approaches.
Bryce Knorr
Published: Mar 16, 2009
Soybeans were the most bullish of the ag commodities over the winter, but unfortunately, that's not saying much. With the South American weather scare season coming to a close and increasing fears of a big acreage increase this spring, beans likely have relinquished their mantle of leadership.
That appears to leave the soy complex subject to the whims of outside markets. Last week that direction came from crude oil, which rallied hard and then stumbled by the end of the week after failing to make new highs — just like beans.
Energy may get a boost this week from Sunday's OPEC meeting. But without further production cuts, that story should quickly become old news, leaving gasoline the best hopes for a rally in both beans and energy. With gas below $2 consumers are again driving, and the market may need to rally a bit seasonally to ensure there's sufficient inventory to last through the peak summer driving season. However, while the mood of the country may be improving a little, drivers are likely to cut back again at the first signs of a big increase at the pump, which could mute rallies in the soy complex too.
Learn more at Weekly Soybean Review.
Permalink: Click here
Tagged: soybeans, soybean, farmfutures, farmfutures.com, www.farmfutures
|