A seasonal peak in soybean prices often occurs in late June or early July based on dry weather concerns. Comparing the South American growing season to our season, it's July in Brazil and many areas are on the dry side. A good Brazilian soybean crop would add to already large supplies. However, a reduced crop, in the face of strong demand, could quickly tighten supplies. Prices rally on less than expected rainfall, dry weather forecasts or reports of crop stress.
Prices also drop sharply with the forecast of even scattered rainfall in Brazil.
This produces an uncertain price outlook and plenty of market risk for all of us still holding soybeans. The domestic soybean market situation isn't clear either. The '99 crop was large. Demand is strong, but weekly exports have been variable. It appears that the LDP has been claimed on a large part of the crop, much of which is still in storage without any downside price protection.