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South Central Iowa | I will play, but first of all, I must mention that I know what it has been like to be short in soybeans at various times since August Sat. I know how it feels to see soybeans fail to go lower even though it seems like that side should have all the energy. That is where we are right now and if you are honest, you will admit it too. We had a pretty bearish Wasde and all it could muster Thursday was to drop 11 cents. Now we have banged our heads against $10.03-05 for 3 days, we are down 16 cents since Thursday, and can't attract ANY VOLUME!!! I know when I was short in August and September, these were the days I would curse and scream at the market "WTF!!!" So much supply, so much burden, WHY CAN'T IT GO DOWN!!! The 50% level of the autumn low to winter high is $10.07. We hover around it because the swing has stopped moving; the nearby month, May, only traded 68,000 contracts today, I believe the lowest volume day of the year. There is no energy to the downside for whatever reason. They have the initiative to go ahead and rip it apart, but there is no one there, the market shrugs......... So taking out the yearly low is a big task, it should try $10.03, $10.01'4, $10.00, and $9.98 first. Doesn't mean we have energy to go up right now, but with this weak of selling interest, I would be afraid that even the slightest buying interest could raise it 20 cents without even thinking.
Basis is a location specific thing and it varies place to place. The basis is wide in my area for soybeans, normally one could expect -60 or -50, but we are at -60 to -80. The thing is though, I don't know of any farmers who have soybeans. We don't have any physical and I can't think of anyone else I've talked to who does. That may just be an area deal. I would primarily explain basis because the elevators already have all of their needs covered and in truth, I would venture they own most all old crop soybeans now anyway.
The inspections are big. But we need to average 394,000 a week as w1891 mentioned. That would be asking a lot historically in the May-July window when we usually see 100-200,000; I could see the market doubting we reach the number, but as Palmtopper mentioned, that doesn't include the extra Census numbers, which were a lot last year. Did you notice the daily soybean sale this morning to unknown at this unusual time for a large sale? Someone, China, thinks our soybeans look cheap right now.
So why haven't we broken $10.88, or $10.80 because I prefer the continuous? Because we don't have a reason yet. But likewise, why haven't we broken $9.92'6, much less $9.34? Also because we don't have a reason to. The soybean market has essentially been down or flat for 8 straight days and that has resulted in an entire 45 cents of loss. I know when I am short, seeing something like that is most definitely not encouraging, especially when I know I have seen it go up 20 cents on nothing numerous different times.
You ready for a head fake though Sat.............. What do you bet that the dollar gets hit hard to downside on Wednesday afternoon and the selling drives down hard all the way through Friday? The rate increase is 100% priced in everything and everyone from Forbes to Bloomberg to MRR to my broker would tell you the same. No one would sell off such a positive thing for the Dollar.
Lot of talk about Soybeans, but honestly, why corn is taking the hardest and longest dip since we set the low in the last week of August is more of a concern to me. It seems to be a slow bleed everyday and corn is not a market that anyone really thinks got carried away in its build over the past 6 months. We are only 26-28 cents off of the contract lows of that timeframe. It, like soybeans, lacks anything that could be considered a volume confirmation in this down move, but for whatever reason, no one wants to buy. If they choose to buy, the most modest of interest could thrust us up quickly. Holding above 50% retracement on the contracts and the Golden 62% on the continuous; 6 down days of 20 cents and the last comparable was in August, 7 down days of 27 cents.
Edit - Trouble countries for wheat are Russia, France, China, and India. Unfortunately, my nuke solution cannot be used in those circumstances because they have the ability to retaliate. Seems to be little hope for the small grains, that's why the girl from #theoatparty returned to her native Brazil. She is just waiting to be invaded. #MBGA #TheBrazilianConflict #OccupyBrazil . We should be able to conquer them in about as much time as it takes to drive a tank to however deep the Amazon rainforest is; I would think 2-3 weeks tops. LOL!
Edited by Conan the Farmer 3/13/2017 22:49
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Inspections-Corn still hot
