From USDA report, US soybean harvest is 4.9% higher than previous expected, while the corn output may be 10.62 billion bushels, less than last month’s forecast of 10.73 billion. After peaking price in September, soybean prices retreat to the July price. In next few days, the market price will be rebound a little. As MACD index indicate the opportunity that soybean price will enjoy a small surge.
However, from a long-term perspective, the market price is still waited for a chance of rising, again. Soybean market price probably will not facing a really climbing until next year. From Bloomberg research, “In Oct. 5 Corn is trading 42 percent above its five-year average in Chicago, while wheat and soybeans are 25 and 30 percent higher, respectively, after dry weather hurt crops from the U.S. to Russia.” At this current moment, consumer will only buy the grains when there is immediate need.
There is no doubt, the supply chain in the next year will eventually being tighten. As the serious drought affect several main soybean and corn exports, declining output may lead world stockpiles of both soybeans and corn to 177 million tons by the end of the marketing year, or about 16 percent of demand, the tightest since the 1975-76 season, USDA data show. Referring David Sheppard, managing director at Gainsborough, England-based grain exporter Gleadell Agriculture Ltd. “It’s a time to keep your nerve and wait for the markets to rebound, because they probably will.”
Based on the previous analyst, I believe in next week, the price of soybean will rebound a little. Thus, I will hold my last week contract about long on Soybean, while go short on corn.
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