But last week, the U.S. Department of Agriculture raised domestic soybean ending stocks for the 2018-19 marketing year to an eye-popping 885 million bushels, more than double the previous year’s inventory and 54 percent larger than the record high.
The United States remains locked in a trade dispute with its top soybean buyer, China, which has been painfully absent from the U.S. market as peak export season begins. The expectation of a record U.S. harvest is not helping matters either, as supply looks set to significantly outpace use.
The lopsided balance sheet would immediately cause one to wonder how soybean futures can possibly rally at all when stockpiles continue expanding to highs never before imaginable.
The composition of the futures market may provide some clarity, as might a comparison with several aspects of the similar 2014 season. Speculative investors have been covering short positions in CBOT futures as farmers hang on to their beans, unhappy with the prices.
CBOT soybean futures eased 6-3/4 cents in Tuesday’s session, but the settle of $8.84-3/4 a bushel was still the second-highest in nearly two months, behind Monday.
