Soybeans rallied 30 cents from Friday’s report day low to the 50- and 200-day moving averages at 9.73 basis November. Consistent rains that have delayed harvests in parts of Iowa, Minnesota and Wisconsin have led to fears of lower production and decreasing yields in those areas. It was enough to spark some buying interest over two sessions but not enough to extend rallies above key technical resistance at the 9.73 level.
The weekly harvest update showed bean harvest at 26 percent complete versus 10 percent last week and 36 percent last year. Condition ratings though continue to impress with 74 percent rated good to excellent up one percent on the week. Private analysts keep raising soybean yield with some forecasts calling for beans at 52.5 B.P.A. That news released today sent the beans market lower losing nine cents giving back some of the Monday rally. It’s a tug of war with the battle between a burgeoning supply versus insatiable demand from China.
Next Wednesday’s WASDE report could be a big one especially if the USDA confirms these private forecast yield estimates above 52 B.P.A. However if the USDA comes in at or near unchanged for a report day surprise, we could see a significant move higher. To be protected on both sides of the market use an option strangle for exposure on both sides of the market. Into the report look to buy the November 920 put and at the same time buy the November 10.00 call for eight cents or $400.00 plus all commissions and fees.