Are Soybeans Headed for New Highs?
Soybeans gapped higher Sunday night following Friday afternoon's release of the Pro Farmer Crop Tour findings.
Wait...what the heck is the Pro Farmer Crop Tour?
It's pretty much what it sounds like, but probably on a bigger scale than what you're thinking. Over the course of 4 days crop scouts (including myself) pulled a Pro Farmer record 1,800 samples of corn and 1,800 samples of soybeans across 7 states which make up for nearly 70% of corn and soybean acres. Each year, the Tour is divided into two sides, the East and the West. Within each of those sides are about 20 different routes that are split amongst groups of 2-4 scouts per car. The Scouts come from a wide variety of backgrounds including farmers, brokers, reporters, and hedge funds. Each team of scouts is tasked with collecting samples from random corn and soybean fields every 12-15 miles along their given route.
So what did the find?
With all the data from last week in, Pro Farmer estimates the national average soybean yield at 49.7 bushels per acre with the margin of error being +/- 2%, which puts the yield range from 48.7-50.7bpa (below the current USDA estimate). With the soybean crop still developing, weather will continue to be a big focus. Weather outlooks throughout the Midwest into the middle of September suggest above normal temperatures coupled with below normal precipitation levels which could hinder yield potential. With uncertainty still looming, new crop weekly options could be a great tool for producers, end-users, and traders to consider using to help manage risk or to express an opinion in the market.
How does the chart look?
Through the month of August the chart has been firming up, posting a string of higher highs and higher lows over the last two weeks. If the Bulls can keep this momentum going we could see a retest of the July highs which come in from 1428-1435. If the Bulls fail to defend the Sunday night gap higher and we close back below that pocket (1390 1/2-1392), we could see that trigger some long liquidation.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Wait...what the heck is the Pro Farmer Crop Tour?
It's pretty much what it sounds like, but probably on a bigger scale than what you're thinking. Over the course of 4 days crop scouts (including myself) pulled a Pro Farmer record 1,800 samples of corn and 1,800 samples of soybeans across 7 states which make up for nearly 70% of corn and soybean acres. Each year, the Tour is divided into two sides, the East and the West. Within each of those sides are about 20 different routes that are split amongst groups of 2-4 scouts per car. The Scouts come from a wide variety of backgrounds including farmers, brokers, reporters, and hedge funds. Each team of scouts is tasked with collecting samples from random corn and soybean fields every 12-15 miles along their given route.
So what did the find?
With all the data from last week in, Pro Farmer estimates the national average soybean yield at 49.7 bushels per acre with the margin of error being +/- 2%, which puts the yield range from 48.7-50.7bpa (below the current USDA estimate). With the soybean crop still developing, weather will continue to be a big focus. Weather outlooks throughout the Midwest into the middle of September suggest above normal temperatures coupled with below normal precipitation levels which could hinder yield potential. With uncertainty still looming, new crop weekly options could be a great tool for producers, end-users, and traders to consider using to help manage risk or to express an opinion in the market.
How does the chart look?
Through the month of August the chart has been firming up, posting a string of higher highs and higher lows over the last two weeks. If the Bulls can keep this momentum going we could see a retest of the July highs which come in from 1428-1435. If the Bulls fail to defend the Sunday night gap higher and we close back below that pocket (1390 1/2-1392), we could see that trigger some long liquidation.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.