Soybean traders continue to monitor strong demand from U.S. Gulf exporters and U.S. domestic crushers. Exporters are trying to bid up for bushels in order to fill the vessels that are starting to back up. Remember, Brazil is close to sold-out and Argentine producers have what appears to be a death-grip on their remaining bushels.
Elevators here in the U.S. continue to offer unique DP arrangements in an effort to entice more soybean sales from producers. Soybean processors in Indiana and Illinois reportedly have little to no meal available into November. Crushers are suffering from a lack of both new soybean supplies and rail cars.
Margins are also heating up in China. Reports indicate China sold over 250,000 metric tons of soybeans from its state reserve auction, and demand was up from the previous auction two weeks ago. Since early-August China has auctioned off almost 2 million metric tons from their reserves. Bottom-line, it looks like demand from China could start heating up, especially out in the November/December timeframe.
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From a technical perspective, soybean prices at $13.05 in the Nov13 contract still seems to be applying nearby resistance. However as each day passes I am becoming more and more optimistic that we can eventually overcome this hurdle and move into the $13.25-13.50 range. Basis bids continue to look the strongest out West and weaker to the East.