Soybean futures halted their current slide on the outlook of excessive rains possibly reducing acreage as domestic inventories decline. The US is the world’s leading grower of soybeans and soybean futures the most volatile grain hosted on the Chicago Board of Trade.
A Mid-Western grain advisor wrote today that “damage from flooding and hail may cut planted area of soybeans (and corn) by two million acres. Plus – according to more than two dozen industry analysts – domestic reserves (of the oilseed) at the beginning of this month are said to be the smallest since 1977.
“Soybeans futures fell early in the week on reports late Monday of favorable ratings for the crop and slack demand. The slide in the market tapered off today to finish the session higher as the market found technical support near the $12.20 level and fundamental support from worry over damaging weather conditions,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current soybean futures situation.
The trend for soybean futures is down and I view this current spike in prices as an expected pullback. I am short this market and expect further downside pressure on soybean futures until Monday’s report.
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