CBOT Soybeans Couldn't Go To USD15+ Could They?


July soybeans closed at $11.47 ½, up 19 ½ cents. The main driving force in the current market is demand, nearby China are still buying way too many US beans for the supply/demand equation to be comfortable. The USDA cut US ending stocks from 165 million bushels to 130 million earlier this week, that is the tightest ending stocks since 2003. Yet already that looks optimistic, things are shaping up to get way more tighter than even that. Stocks to usage is 4.3%, that is the tightest since 1968, and China just keep coming back for more. They bought 132,300 MT old crop and 178,000 MT new crop according to the USDA today. Export sales for the last four weeks are double what they were a year ago. The US will run out of soybeans to sell at this rate long before the late-planted new-crop becomes available. Ending stocks are currently projected to be 130 million bushels, more than a third less than a year ago. And physical stocks got so tight then that the September contract moved up 274 cents on the last day of trade. Where prices will go then is anybodies guess. $15...$18...$20... come on now, you are taking the pi$$? No, I wouldn't be surprised. Forget how many new crop acres will be planted, it's irrelevant. If you want soybeans prior to next harvest you are going to have to pay. Handsomely IMHO. But what do I know?


July corn closed at $4.28 ¼, up 2 cents. Weekly export sales and actual export shipments were very strong for corn today. Physical exports were record large for the current marketing year at 1,272,300 MT. Wet weather is expected to continue for the next few days before things dry out Sunday, potentially for a full week of relatively dry conditions. The later the crop is planted though, the more it is at risk from lower yields and early frost potential.


July CBOT wheat finished at $5.93 ¼, up 4 ½ cents. Weekly export sales were poor, but the global outlook for production in 2009 is well behind a year ago. Crops in Europe, Ukraine, Russia, the US, Canada are all certain to be down. Plus the outlook for longer term production in Argentina and Australia is far from certain. These are the main wheat exporting nations of the world. Nobody is expecting significantly higher output in 2009, it's all going downhill.