Fundamental outlook — Bull market correction — Soybean prices are in a consolidation mode, but the longer-term trend remains bullish with the USDA's recent cut in its U.S. production, U.S. and global carry-over estimates and the tight U.S. 2011-12 stocks/use ratio of 4.9%. However, global soybean supplies are adequate with the 2011-12 world stocks/use ratio near average at 23.2%.
Fundamental outlook — Bear market correction — The dollar remains in correction mode as the unresolved European debt crisis and fragile global equity markets keep the safe-haven demand strong for the dollar. However, the dollar’s longer-term trend remains bearish because of:
- The U.S. credit downgrade and the U.S. debt situation in general
- Repatriation demand for the yen in the wake of Japan’s earthquake crisis
- Weak U.S. economic data
- Poor U.S. interest rate differentials with the Fed on hold until at least mid-2013
- The intractable U.S. current account deficit
Have a prosperous trading week.
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