I see no real way for Brazilian corn AND soybean imports to have a major impact on U.S. old-crop prices during the coming few months. Yes, a few extra cargoes here and there will help to some degree, and provide some short-term bearish headlines, but I doubt it does much to solve the extremely tight U.S. inventory problem.
Soybean bears continue to question the recent rally, especially in new crop. Many sources close to the trade thinking spread pressure and unwinding is a major part of the reason. For the past several weeks spec-money has been playing long both corn and wheat against short soybean positions. Now all of a sudden it looks as if a large majority of the corn is going to go in the ground and fewer overall corn acres are going to be lost or switched to soybeans. Some much needed rainfall in Southern Russia is also causing some of the wheat bulls to rethink price appreciation.
Moral of the story: nothing has really changed in regard to the negative fundamental outlook for new-crop soybeans other than the fact traders may not be as bullish new-crop corn or wheat as they were a couple of weeks back. Therefore liquidation of the long wheat and corn side has caused pressure, while buying back shorts on the bean side has caused a rally. I am certainly not discounting the fact old-crop tightness has has helped pull prices higher as well, I am just pointing out there could various unforeseen events taking place behind the curtain that is also helping to fuel the recent rally.
South American supplies will NOT be able to help overall shortages in both US corn and soybeans. I have had several subscribers ask me about Brazilian corn and soybean imports and how they will effect the US market. Heres what I have been hearing and I how I see it playing out.