Analyst: Beans Find Support While Farmers Remain Optimistic
We ended the week’s trading on a rather quiet note. The market traded a rather tight 7¼¢ range. Pressure came from increasing estimates of the Brazil crop size and a warmer, dryer weather pattern moving in. It will take several more days for the wetter portions of the Corn Belt to dry down enough to allow for planting, but optimism is high that farmers will be back in the fields by the end of the weekend.
Support for the market is coming from end-user pricing as well as hangover from the USDA’s 2017/18 endings stocks estimate coming in below the trade’s expectations.
Trade-wise, we anticipate the market to continue to grind lower as the record crop in Brazil, excess supply of U.S. old-crop beans, and the anticipation of record new-crop acres will keep sellers aggressive on rallies and end users waiting for the market to come to them. Our in-house pricing model suggests this market is on the path to hit $8.84 for the early-summer low on the November contract before a summer bounce. Sunday night’s opening trades will be based on what the updated maps show Sunday night.
Rich Nelson | Allendale Inc. | 815-578-6161
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