Will There Be Room in the Bins for Beans This Season?
Today’s Spotlight Market
A record harvest is expected not just for Soybeans but for Corn as well. The USDA estimated the 2014 Corn harvest at 14.032 billion bushels with an average yield of 167.4 bushels per acre. While both of these estimates would be new record highs, analysts were looking for even higher totals including average yields of a once unthinkable 170 bushels per acre. Either way, producers will be extremely busy come fall in harvesting these historic crops. ?
Fundamentals? – ? U.S. Soybean producers may face a dilemma this year as the odds for a record crop appear more likely as the crop moves through the key pod setting stage this month with what appears to be near-ideal weather conditions. Rainfall has been more ample during the so-called ?dog days? of summer, with moderate temperatures relieving the usual summer stress on the crop. Current weather forecasts are calling for additional rainfall in the next 6 to 10 days, which could help yields to improve even more than the current USDA estimates.
The USDA forecasted a record 3.8 billion Soybean crop this season, which if accurate would greatly surpass the previous record of 3.4 billion bushels produced in 2009. Average yields are also expected to be a record 45.4 bushels per acre. What might concern producers even more than prices that are near 4-year lows, is the availability of storage for this record crop. More temporary storage will be needed on the farm as many grain elevators are expected to be at capacity as the harvest begins. In addition, a shortage of rail cars could cause bottlenecks as crop shipments face delays of week or even months until rail equipment becomes available.
Technical Notes? -? View Today’s Chart
Looking at the daily chart for November Soybeans, we notice prices attempting to form a near-term bottom after tumbling to 4-year lows following the bearish USDA crop production report. While prices remain well below both the 20 and 200-day moving averages, we do note, however, what appears to be a bullish divergence in the 14-day RSI, which failed to make a new low reading on the recent price decline. The overall reading for the 14-day RSI is still weak, however, at 37.71. Thursday?s low of 1038.75 is the next support level for November Soybeans, with resistance found at the recent high of 1118.75, made back on July 17.
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