Consider Strategy Options as Brazils Soybean Harvest Nears [Video]

Good weather in Brazil over the past 60 days and a forecast for continued conducive crop growing conditions have weakened both soybean and soybean product prices. Expectations for record supplies continue to grow, with the USDA currently estimating the Brazilian soybean crop at 169 million metric tons, up substantially from last year’s 153 million. Year-to-date, U.S. exports are strong, up 10% compared with last year. That is expected to slow, as the overriding big picture perspective of increasing Brazilian production coupled with a weakening Brazilian real is keeping pressure on prices. To make matters potentially worse, for an even more bearish price outlook, some private estimates are now pegging the crop near 172 million metric tons.

The market is reflecting confidence in growing supplies through lower prices. From the perspective of an end user, the soybean market is currently offering prices that are on sale. For our definition, we suggest …