WEEKLY SOYBEAN REVIEW: World Gets Nervous About Soybean Supply
Bearish arguments are falling by wayside.
Bryce Knorr
Published: Jan 19, 2009
USDA last week threw a few road spikes into the path of bulls in the soybean market, but didn't appear to do much lasting damage. While this remains a rally in a bear market, short-term bearish arguments are falling by the wayside, one-by-one.
Now, this doesn't mean the long-term direction of beans isn't down. Indeed, new crop has substantial risk into the winter of 2010. But for the present, old crop futures are taking aim at the next level of chart resistance at $11 to $11.20.
The old crop/new crop spread, one of my key barometers, reflected this dichotomy last week, surging. Those who attended our first Farm Futures Management Summit in December, or tuned into my online presentation, know I suggested buying the spread as a better way of participating in rallies than futures or options. The spread has gained around 75 cents since then, making it a good surrogate.
The other qualification I had about the rally, reliance on Chinese purchases, also began to diminish last week.
To read Bryce Knorr's complete weekly soybean review, click HERE.
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Tagged: soybean, farm, usda, farm futures, farmfutures
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