Soybeans traders are desperately trying to figure out when the "free-fall" in price will end. For those fans who have not been carefullyfollowingalong, the old-crop AUG13 contract has given up close to $2.00 per bushel since last Tuesday, while the new-crop NOV13 contract has shed close to $1.00 per bushel in the same time frame. The problem is that many bears believe we may have another $1.00 lower to go by harvest. Export sales were disappointing yesterday, but China continues to be a buyer of new-crop US soy. Not sure it will be nearly enough to reach the USDA's lofty estimate, but nonetheless, at this moment they continue to be steady buyers. I should also point out the fact the Brazilian soybean crop seems to be getting bigger NOT smaller. Several sources are now much higher than the current USDA production estimate of 85.1 million, a few analysts are now estimating the crop at between 88-89 million metric tons.
The old-crop story seems to be somewhat dead in regards to "exports," but I am hearing the crushers out east are still aggressively looking for domestic old-crop supplies. Producers are starting to ask more and more questions about "sunlight," or should I say lack there of. One farmer called in yesterday and told us,"The cool wet weather and lack of overall growing units, not only heat units, but sunlight hours as well, are really stating to be a concern."With lack of "heat and lack of "sunlight" there is some speculation beans may NOT yield as good as many in the trade are anticipating. Bottom line: A short-term technical bounce may be in order, but I doubt this market can mount a sustained rally during the next couple of weeks.