by: Bill Reavis
February 8th, 2012
Chicago soybean futures rose to their highest level in more than three months (as of noon 2/8) with demand for US soy buoyed by concerns over drought-hit South America. Thursday's USDA World Supply and Demand Report will be closely watched for revised forecasts of South American crop production.
Last Monday, Rueters reported that grains analyst Celeres lowered its forecast for Brazil's 2011-12 soybean crop to 72.04 million tonnes, down from last month’s estimate of 74.4 million. Argentina's soybean crop is now expected to total 46.5 million tons, down from previous estimate of 51 million tons.
This news is prompting Chinese importers, the world's largest, to buy more from the US. (Dow Jones News Wire)
March soy rose 0.4 percent or 4.5 cents to $12.44-6/8 a bushel by 10:15 a.m 2/8. CST, the highest level for the front month since late October 2011. Soybeans have settled higher in five straight sessions. (CME Data Feed)
Argentina and Brazil are major soybean exporters and compete with the US for business on the global market. A downbeat crop outlook in the South American countries would likely mean greater demand for US supplies.
Could this be another case of “buy the rumor and sell the news?” Possibly, but if it’s not and soy pushes through key resistance levels ~1246, look for the Survival Plan and Diversified Commodity Basket to enter a long position.
Long term, keep an eye on snow fall totals in the US. This year has been mild in the US...to say the least. ( Just ask anyone who owns natural gas!) Not good news for farmers depending on snow melt to provide moist soil for the crucial early growing stages in a few months.
In an increasingly interesting global weather year with record cold spells in Europe, exceptionally mild weather in North America and drought like conditions in the South America, WWFS expects to see large price movements in grains and softs.
The Survival Plan and Diversified Commodity Basket both trade soybeans.
Soybean Chart
Regards,
Bill Reavis
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
239-221-88731
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources, and other relevant circumstances.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. This is provided for informational purposes only. No statement in this blog should be construed as a recommendation to buy or sell a futures/options contract or to provide investment advice. The content provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness.
|
.jpg)
