Highlights
We really do not have a logical explanation why soybeans futures are up 68¢ the past 3 trading days and up $1.06 the past 15 trading days.
South America most likely will harvest the largest crop they have ever harvested. The world carryover is a 116 day supply; it is truly a burden for $10.50 futures. Last year’s world carryover was a 107 day supply and you well remember what a painful experience $9.52 soybean futures were last August. The dollar index was 100.5 that week in August and yesterday, the dollar index traded to a 26-month high of 110.18! A strong dollar is supposed to be bad for commodity prices! What happened?
Respected consulting firm Safras & Mercado raised Brazil's soybean production to 173.71 million mts (USDA 169), marking a 14.1% increase from a year ago and up almost 2 million mts from their earlier estimate. Safras & Mercado sees corn production at 135.743 million mts (USDA 127). As of January 10, the harvest of Brazil's summer (first) corn crop is 3.3% complete and soybean harvest estimated to be 1% complete.