Death comes to us all. Life's but a walking shadow | If you compare the change in commercial short hedges for both old crop & new crop you see that they both increased 30-some thousand contracts between the 1/10 & the 1/17 report. Likewise managed money's long contracts increase a similar amount in both old & new crop. Three of the four market days of the recent rally occurred between those two reports. I suspect that a good number of producers sold beans this past week, as I did myself. Something happened that doesn't happen too often here, both the basis narrowed (became more favorable) and the market rallied at the same time. Managed money simply served their assigned role of taking the other side of the move.
Now some think that the fact that the dollar weaken explains the change in soybean price but the change in the dollar index only amounted to about 1 percent. I can't see how this one percent change in the DXY could account for the 60 cent change in soy price (6%).
What I find interesting, in my conversations with the broker, they are currently loading directly into rail cars for export (instead of into a bin, then the rail car) and the big hold up is the lack of cars. And as I mentioned, they were quite happy to pay up, both the basis and the price. This doesn't feel like a market that is going to collapse tomorrow due to South American beans flooding the system. |
A Few Observations on the Bean Market
