Big crops tend to get bigger, and with the United States’ second largest soybean harvest out of danger weather-wise, there is a great deal of downward pressure on soybean futures. “It’s a supply market,” says Richard Crow of Crow Trading. Given the large expected yield, high carry out and high soybean oil stocks, soybean stocks don’t have anywhere to go. “Harvest is upon you, and until you get that crop put away, there is no incentive to do anything on the upside,” Crow says. During October, he expects November beans to drop to $5.20 per bushel. The big question, according to Crow, is what Brazil’s planting intentions are.
Anne Frick, senior oil seed analyst for Prudential Financial, says usage rates relative to supplies will be lower. In such a year, the harvest low commonly occurs in October. She anticipates a low between $5.15 and $5.00. “There is strong resistance in the $5.65 to $5.70 area,” she adds.