Soybeans continue to keep us in suspense. What is happening with Chinese demand, cancellations, etc.? The trade is also extremely curious about things that are taking place in South America. Brazilian insiders are reporting that the harvest is moving along nicely and loadings at the ports, at least up to this point, are much improved from a year ago. In fact, some sources are telling us the Brazilian harvest could be close to 40% complete by the end of this month. According to the recent port data out of Brazil, there is an estimated 2.4 million metric tons worth of ships waiting to load soybeans in with 3.2 million more ships scheduled to arrive later on. This continues to make me extremely nervous about our unpriced new-crop soybean bushels.
Remember, this year is a little different than last when Brazil had to replenish their domestic supply early on. This year they seem to have ample domestic supply and the bushels are in turn going straight to the exporters with little to no competition. Moral of the story: Soybeans seem to be flowing more freely to the Brazilian ports and a few of the logistical wrinkles may actually be ironed out. I am not saying all, but a few of the problems may have been rectified. In response I have lowered our next new-crop cash sale target down to to the $11.40 level. This might not be low enough, but with Chinese demand for old-crop supplies still being reported, there is an outside chance an extended old-crop rally could continue pulling us higher.