Still firm price for nearby soybeans
Normally when producers sell aggressively at harvest, the elevators are flooded with supply, and the cash price will sour compared to the Board Price. Not this year. When that happens, demand is strong, and the market is trying to tell us something.
While South America is on track for another year of record production, the crop is not available yet, and the world is relying on what the U.S. has on hand until March when the earliest of the South American crop is ready to be harvested and thus become available to export to the world. Until that time, expect the U.S. to have modest export business. But it doesn't have to be stellar because the world end users may have the ability to be patient and only buy from the U.S. as needed until the South American crop becomes available.
If you look at the prices of soybeans on the Board of Trade, you will notice that the November and January futures prices are trading much higher than the March and July prices, reflective of demand being strong now for supplies. We expect that trend to continue into year-end. By that time, trade will know if the South American crop will have any production issues, either from weather stress or pest/fungicide issues. If there are no production issues in South America, soybean futures will eventually slide lower in those front month contracts. For now, $13 is overhead resistance, with $14 being the bigger objective higher (if production issues in South America occur), and $12 will remain as stable support.
If you have questions, you can reach Naomi at firstname.lastname@example.org, or post a marketing question on the Women in Ag discussion group.