Soybeans rallied from $8 to $12 from March through June and analysts believe the move can continue.
“Because of the late plantings for corn, there’s likely going to be an acreage switch [in July]. We anticipate a transition where end users start to walk away from higher premium old crop supplies and start to look more into new crop supplies,” says Joe Victor, vice president at Allendale. Victor sees a potential of $12.75 in August futures, and says new crop November beans could reach $11.50.
“The market structure of soybeans remains very bullish,” says John Sanow, grains analyst for DTN. “We’ve held the $12.20 [level] and we’re looking for that to continue.”
Beans held the move beyond the 50% retracement from last year’s sell off and now could push to $13.70, says Sanow.
Doug Carper, president of DEC Capital, says the August contract will still be at a premium to the new crop contract in November because of a historically tight supply of old crop soybeans. “We’ve been in the $12.50 [area for the July contract as of June 9] and the August contract is about $1 per bushel lower. A new contract high is in the offing, provided we don’t see any surprise from China canceling a number of contracts they have open,” he says.