Soybean Futures Higher on Lower Reserves

The USDA has reported US soybean export demand increase after South American soybean productivity had been cut after recent drought conditions.  We can expect US soybean inventories to be even less than forecasted only a month ago.

Specifically, the USDA is forecasting US soybean reserves (before the 2013 soybean harvest) to be 140M bushels – down from 145M bushels estimated last month.  Total US soybeans reserves for August 31st are expected to be 175M bushels, which is also down from 210M bushels this time last month.

Chris Hildebrand, vice-president of trading at HighGround Trading Group in Chicago, stated today in an e-mail interview regarding the current soybean futures situation, “(Soybean) supplies are going to be tight up until harvest.  f we don’t get some much needed rain over the next 2 weeks, you may see higher (soybean futures) prices as everyone is concerned about supply.”

The trend for the soybean futures complex is mixed with soybean futures and soymeal futures entering into technical “UP” trends (in my work) just today, while soybean oil futures remain in a clear downtrend.  We are long soybean futures, and will look for a low-risk opportunity to get long soymeal futures when the occasion presents itself.

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