Grains market see soybeans rally in December

2017/12/7 16:35:29

Ukrainian soybean producers harvested about 3.7 million tons of soybeans this year compared with 4.1 million last year. Per hectare yield came in at 1.93 tons per hectare in 2017 compared with 2.29 tons in 2016, Ukraine’s Ministry of Agrarian Policy and Food said in a late November statement.




Brian Grossman, a Chicago-based market strategist with Zaner Ag Hedge Group, offered the following world market outlook for Born2Invest on December 7, 2017:


As we head into the last month of this calendar year, the soybean complex appears to have the most optimism out of the grains. Aside from soy oil, the soy-complex seems to be enjoying the month (for now) of December.


January soybeans successfully poked up and over the key USD 10 mark and the soy meal market is even more impressive. January soy meal started this new week with a significant charge higher, scoring a multi-month high on the charts and underscoring the fact that global demand for protein products remain strong.


However, December is a month that has a tendency to go either way. Four of the last seven years saw soybeans finish the month lower by an average of 29’2 but the three higher months averaged a rally of over 80’0 cents! With January 18 already up roughly 17’0 on the second trading day of the month, it appears to be off to a good start.


Headlines, of course, are focusing on the South American weather. Potentially concerning to the market bears is the fact that rain remains to be hard to find recently. With planting progress initially slowed down early in the season, starting off on the dry side has really energized the topic of La Nina and its potential consequences both there and on the state’s side come spring. However, that is long ways away yet and in my opinion, still premature after the production surprises we experienced this year.


While the general “mood” of the market may be trying to improve in the close of 2017, there are still several hurdles for the markets to jump and they may require quite a leap. That hurdle is the December WASDE report due on December 12th. With average analyst estimates still a few days away, this report may have some concerning points that the USDA could choose to address this round.


Yield is likely expected to remain unchanged as typical of the USDA for a December WASDE report. With production not on the table, demand will be front and center. The USDA remains hopeful that US soybean demand will pick up through the season with an estimated 2.250 billion bushels expected to be exported; up from 2016/17’s 2.174 billion bushels.




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