Long-term soybean bearishness
The bean market ended the week on a negative note as last week’s sell-off continued. For the week, the new-crop beans ended 24¾ lower and 37¼ cents off the week's high. The July soybeans settled the week 23¼ cents lower.
With the warmer and drier week we have just seen and a warm, dry forecast in the works, it is thought that producers were able to play catch-up by getting the rest of the beans planted. We would look for bean plantings to reach the 95% level for Monday’s report. We would also look for the good to excellent ratings to bump up 1 to 2 points Monday.
The U.S. dollar continued to rally today, and that added to today’s pressure. Next Friday, the USDA will release its updated acreage estimated. The average trade guess for bean acreage is 77.933 million acres. This would be up 735,000 acres from the March survey. The high end of the trade's guess is 79.240 million acres, while the low end is 77.100 million acres. Allendale is estimated bean acres at 79.240 million acres.
As for the quarterly grain stocks, the trade is estimating them to come in at 442 million bushels down from a year last year’s June report stocks estimate of 667 million bushels. Allendale is looking for quarterly stocks to be 422 million bushels. With the weather outlook improving and potentially seeing more bean acres than anticipated, Allendale has a long-term bearish view for the new-crop beans and is currently looking for a fall low at the $10.54 level. Next week’s price direction will be dictated by Sunday night’s weather forecast and positioning for next week’s report. --Jim McCormick
- 6-11-2013 Bought 1 unit of November $11.00 bean puts for 10 cents: Risk value of option will hold until anticipated “fall break.”
It is at these turning points in seasonal prices that trading becomes just a little harder. While the seasonal low in cash cattle trading typically occurs in later July, we must remind ourselves that August and October futures are trying to price in where cash will be at the end of August and the end of October. We have this sticky situation where cash cattle can continue to break for a few more weeks, but futures traders are already looking ahead at the period when prices are back on the upswing. At the time of this writing to we do not have any cash cattle trading to report.