Everything broke right for the old crop soybean market in the first half of 2009. Argentina's crop was shriveled by drought and China went on a buying spree. By snapping up soybeans from its own farmers to rebuild reserves and strengthen rural incomes, the government forced processors to turn to imports, which surged to record levels.
But that rally is history. Now the bean market is trying to hold on to avoid another leg down.
November futures were able to hold lows last week, extending the consolidation. Bullishness from outside markets failed to help beans, in part because China is due to start selling its reserves this week. While that should be bearish, questions remain as to whether processors will bite; the offered prices are well above what they have to pay on the foreign market, and most seem to have ample supplies.
To read Bryce Knorr's complete weekly soybean review, click HERE.
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