Soybeans finish week strong thanks to brazil's dryness

Beans ended a wild week of trading on a positive note as dryness issues in Brazil and follow through buying from yesterday’s reversal propelled the market higher. The center/north areas in Brazil, Mato Grosso and Goias, have seen drier than normal conditions since planting but the news wires were talking it up in a big way this week. These two states account for 42% of Brazil's soybean production.

The current forecast suggests that dryness issues will continue into the period that begins to determine yields. The farm federation in the #4 growing state, Goias, has lowered their production estimate by 6% to 9.8 million tonnes due to dryness. They see further declines based on the current forecast. Technically, the market had strong close yesterday and that propelled addition short covering today. With this week being the last full trading week of the year it looked like market bears were booking profits before the holiday trade kicks into full gear next week.

Next week’s trade could be another volatile one as volume tends to drop going into the Christmas weekend and that can lead to some erratic moves. Price-wise we continue to think we are at the higher end of the trading range and think that a move over $9.00 looks like selling opportunities without a severe weather problem in SA.

UAC Information Center by information Agriculture.com