Soybean Futures Down on S. American Rain

The two biggest soybean exporting countries after the US – Argentina & Brazil – are forecasted for rain in the next two weeks.  Soybean futures initially sold-off hard on this outlook and the prospect to boost their yield potential.

The rain predicted in Argentina alone is 2 inches in the next two days which hasn’t seen any outright precipitation in two and a half weeks, and three more storms looming in the next two weeks. The USDA predicts soybean production for both countries to rise well over 25% to a record amount.

Healthy rains are being forecasted for Argentina and Brazil which is expected to pressure the soybean futures. These rains are coming at the optimal time as the (soybean) crop is entering its critical stage of development,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current soybean futures situation.

The newly emerged soybean trend to the upside has begun, but today’s action puts soybean futures right back at a crossroads.  We are long soybean futures will sell stops in place each day.

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