With a USDA Shrinking Forecast, Soybean Futures Soared

Soybean futures gained as much as .65c per bushel yesterday following the USDA’s forecast of falling domestic and world stocks, plus heavy domestic crushing volumes and lower South American production. Today soybean futures backed off just over a nickel to close near $10.79 per bushel at the Chicago Board of Trade.

There were several sections of reports released yesterday concerning soybeans such as, world grain stocks for the end of this current fiscal season, the May ’16 global supply demand report, and an update of its forecast for soybean stocks for the next season. This season coming to a close the USDA forecasts stocks to be 74.25M tons – 3M tons less than last month’s forecast, and 2M tons less than the analysts were forecasting – and next season they expect stocks to be down to 68.21M tons – a three-year low and nearly 5M tons below expectations.

With the sudden Chinese buying spree of recent, and the surprise soybean market numbers from yesterday, the market may have been taken off-guard,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental assessment of the soybean futures market. Plotkin added,It appears as if a classic case of demand outpacing supply may be in the works for the soybean (futures) market…we’ve only begun the summer rallying season.”

Soybean futures trend is up with no top yet in sight. Soybean futures may be realizing key resistance at this time, but higher prices may easily be seen after the coming dips in the marketplace.

ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.