Price No Factor for Soybean Futures

For the first time this week, soybean futures “lifted off” again to test the recent highs.  This increased price action for soybean futures may be a telling tell that demand has yet to wane at a time when drought has decimated some of the soybean crop.

The USDA has reported the amount of soybeans inspected for export has risen 22% as of last week, and soybean commercial processors crushed almost 2.5% more soybeans last month than in June.  This demand comes at a time when the largest soybean growing states only realized half the normal amount of rain in the past two months.

Demand remains very strong for soybean (futures) as the crush margin remains strong. While we have had some welcome rains across areas of the Midwest that will help the soybean crop, a significant amount of damage has already been done and may be irreversible,” said Kevin Craney, a senior commodities broker for RJO Futures in Chicago, regarding the current soybean futures situation.  Craney added, “Soybean (futures) have more price rationing to do, and I believe they will lead the grains higher in the weeks and months ahead.”

The trend for soybean futures technically crossed over to down in my work recently, but I bucked the technicality and went long in early Wednesday’s trading session.  I am watching the grain markets closely.

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