The soybean futures are expected to remain bearish. Not only do we have adequate supplies, but new crops are off to a good start. Yesterday, the USDA reported that 6% of the soybean crop is planted already compared to the five year average of just 3% for this week. The highest planting progress at this time was at 7% in 2012. Keep in mind that the USDA estimated that nearly five million acres have switched to soybeans putting acreage at 88 million. Some traders believe that even more acres are switching in the Dakotas where there are some delays in planting wheat. New crop bean fundamentals are bearish. The market is going to need some adverse weather conditions to turn this trend higher. Perhaps the only bullish argument for the soybean futures market right now is that there is a large short position held by managed funds. That being said, only unfavorable weather conditions can turn this market direction around.
July soybean futures have taken $1.50 a premium out of the price since mid-January. The market is likely just taking a breather right now and waiting for some direction from planting progress and crop condition updates…which really means the weather conditions.