Will New “Ghost” Acres Appear For Soybeans
Today’s Spotlight Market? -? Soybean prices rose to their highest level in almost a year on stronger demand from China. China is said to have ordered 110,000 tons of 2014-2015 Soybeans, easing fears that demand from the Asian giant may be soft. There were fears that China may default on some imports due to bird flu and receding pork prices, which could decrease demand for Soybean Meal. While the news from China is positive, weather conditions may put a cap on Bean prices.
Fundamentals? – ? Weather conditions are expected to warm up going into June, and the grain belt is expected to see healthy rains. This is good news for farmers. Presently, roughly 33% of the US crop has been planted, which is 5% behind the 5-year average. Traders may want to keep an eye on North Dakota and Minnesota. Corn plantings are already behind schedule due to the long, harsh winter. There are 10 million acres that could shift from Corn to Soybeans if farmers are unable to get Corn planted in time. There are also 4-5 million unplanted acres the USDA did not account for. That makes a total of 14-15 million acres that could, theoretically, shift to Beans. This could be a downer for prices.? ?
Technical Notes? – ? View Today’s Chart?? -?? Turning to the continuous chart, we see the July Soybean contract pushing through the recent high close of 1518.75.? If prices are able to confirm a breakout above this level, they could test the next significant resistance level at 1575. The RSI indicator is closing in on overbought levels, which could restrict further advances.? If, however, the Soybean market sees a breakout with overbought conditions, the breakout could be explosive.?
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