Let's look at the 15-year history of cash soybean prices from March through July. We have experienced very strong seasonal trends for soybeans to rally sharply into the summer. As you can see in Table 1, from 2001 to 2015, we only had 3 out of the 15 years that prices weren't sharply higher in the June to July period in relationship to the fall and early spring prices.
Will this year be any different?
Table 1. 40 Years of Soybean Price
Let's look at the position of Managed Money. This year the funds have held a large long position going back to a year ago. This is very different than the spring of 2015 and 2016 when the funds were net short a large position, relative to historical levels. Short covering rallies led to bullish spring and summer moves in those years. Starting in January (Diagram 1, below), the funds started liquidating this large net long soybean position and prices have followed.
Are the funds going to continue this liquidation of their soybean position? Recall, just a month ago many of the "so called" commodity experts were talking inflationary hedge bets and commodities were the going to benefit from that. What are they saying today?
As of March 21, the funds were net long 60,000 contracts. To get more analysis and see the current Heat Maps...try the 30-day free trial. Click here to start your trial offer.
Diagram 1. Soybean Managed Money Position
By Chris Benson
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