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Middle Tennessee | Okay, first one insight for me is that, say, prices rise for many reasons, sometimes merely because they are not low enough to short or attract sellers. Rising prices aren't always bullish. Also, buyers buy for many reasons, to cover shorts, to burn short exposure and short-bought parties, etc. etc...
We all know those things, prices move for lots of different reasons and buyers buy for lots of different reasons. An example, Chinese buyers aren't buying real estate in Toronto and Vancouver because they are a great deal. They buy to get money out of the country, obtain visas, etc. etc. etc... Chinese crushers can't afford to see depressed bean and meal prices, when bean prices go down, their margins are hurt. They are whales and they have an interest in supporting the market. That is especially try when commercials are holding so much, record, inventories of meal in China. It was only a few short weeks ago cargoes were being turned away because there was just no room for the beans.
But if in fact inventories are becoming burdensome, at some point they will get a price they like and they will dump. Soybean acreage is supposed to go up 2.5% this year in Brazil. Record bean stocks in South America. Record acreage and yield for the current US crop if you believe the USDA. Rising soy acreage in China. Oil World says Chinese bean imports will not grow this year, in disagreement with current WASDE numbers. The Brazilian government and corporations are beset by scandal after scandal, making reforms to support the currency very hard. It just doesn't look good to me. | |
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China Again Overnight
