Can plantings push soybeans lower still?

By | April 13, 2015

I read an interesting report over the weekend that quantified the results from the recent prospective planting report.

We already know that should expectations be met for soybeans, then we’d likely see very high ending stocks at seasons end by historical standards.

However what was interesting was that should yields be only average then we’d still be on track to have the highest level of ending stocks that we’ve seen in five years. And so far this season things are looking stronger than average.

This all comes on the back of record South America crops which the market certainly is aware of.

For the sake of simplicity, just taking a quick look at chart of soybeans would indicate that if we are going to get anywhere near this ending stocks figure (given an average yield), then there is certainly an argument for another move lower.

ZS

A move to 800 certainly doesn’t seem out of the question with the current fundamental picture and given the seasonal period that we’re in, there might be a few traders squeezed out of their long positions in both soybeans and soymeal.