Soybean Futures Hold Rally on Brazil Shipping

Special circumstances and weather are said to be the culprits of driving soybean futures higher and boosting domestic demand recently.  Shipping delays and dry weather in the Southern Hemisphere are helping soybean futures in a $1.25 counter trend rally since last month.

According to 31 industry analysts, soybean stockpiles will shrink to a nine-year low before the next US soybean harvest.  The USDA claims soybean reserves will amount to 4.2% of actual demand – the lowest since 1965.

“…look at old crop (March Soybean Futures) against new crop (November Soybean Futures) you can see we have a shortage.   The prices are much higher for old crop soybeans compared to new crop,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current soybean futures situation.  Moreno added, “In my opinion, buying old crop soybeans against new crops soybeans will be a good choice.

The trend for soybean futures are clearly up.  We need for soybean futures to digest tomorrow’s USDA Crop Production report, and hopefully pull-back a little lower, to get back in to this market in a lower-risk position.

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