Soybeans have been making a pretty consistent retreat ever since the commodity bull market came to a crashing halt last summer. A worldwide recession will do that, and Allendale Vice President Joe Victor says the poor global economy is the key factor in his bearish outlook for beans. “The worst case scenario for soybeans is a higher dollar and a lower trending stock market,” Victor says.
Thomas J. Feeney, broker with Archer Financial Services, says it is all about planting intentions right now and he expects there to be a shift. “You are going to see a shift to beans [from corn] given the impact costs,” Feeney says. Victor disagrees, stating that a survey of farmers indicated they would go with a normal rotation and that based on his calculations, “right now there is more profitability in corn.”
The wildcard as usual is China. Victor says that China has increased its purchases of U.S. soybeans for this time of year due to weather and political problems in Argentina but adds that China can switch back at any time. His upside target for July beans in April is $9.70 with a downside target of $7.80, just below the December lows.
Feeney also is bearish and believes increased acres planted could put additional pressure on bean prices, pushing them to test the December low of $7.97. “It is about plantings and hoping on Chinese demand,” he says.
