Plenty of studies, my own included, have pointed out the potential for mid-May soybean sales to be good ones, so it was hardly surprising that the market pulled back on Friday, right on time. But this volatile market likely is not done providing big surprises.
USDA confirmed tightening old crop supplies in its May report on Tuesday, and the final figure is like to get even tighter. While Chinese buying plans remain up in the air, providing additional volatility, my balance sheet shows more reductions in carryout are likely.
July soybeans are now clearly following the bullish trend, and the big old crop/new crop inverse likely foreshadows a squeeze into delivery — something the July contract is famous for. The $11.50 target reached last week was just an interim one, though both old and new crop prices could set back into the end of the month.
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