For Soybeans the immediate focus is on the Argentine farmer versus its government negotiations. Last Friday farm groups returned to a soft strike (no road blocks) and have scheduled a meeting with the government on Tuesday May 6th. Farmers are selling just enough corn and soybeans to pay their immediate bills, but not a bushel more! In a recent poll Argentine citizens are at an 80% level, disapproving of the country's President handling of the farm strike. It appears just in a matter of a few weeks, farm groups have won the sentiment of the people they feed and that is viewed as a very big positive for the potential for an end to the strike if the President wants to keep favor. New crop soybeans also continue to monitor the corn planting progress and if delays expand for corn, soybeans acres are perceived as expanding from the March to June acreage reports. Since 2004, acres have declined from the March to June acreage reports, even when there was an economic advantage to plant soybeans compared to corn between the two reports. The average reduction in acreage from the March to June period has been 1.558 million acres. The minimum adjustment lower was 602,000 acres with a maximum reduction of 3.059 million acres.
Soybean plantings were showing prerelease trade estimates for Monday's progress in a range of 4-8%, which compares to 2% last Monday, 8% last year and a five-year average of 18%. NASS actual results suggest 5% of the crop has been planted as of Sunday, May 4th.
The question is, will world demand shift back to Argentina and away from the US once the strike is ended. A new harvest with competitive prices to the US and Brazil, it is very likely a return may be in order, even by those who have minor scheduling disruptions. The trade remains focused on Argentina strike developments and the Midwest weather forecast. Stocks of USA soybeans remain tight and are expected to tighten further (30 million bushels) in the May WASDE based on better than average exports. With much of the focus on corn planting progress, Allendale recommends to sell rallies for the short term. For more trade recommendations call an Allendale representative.
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