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Consultant says tight soybean stocks providing support

A commodities consultant says that already tight U.S. soybean stocks could become even tighter.

Karl Setzer, partner with Consus Ag Consulting, tells Brownfield, “There are now thoughts that this soybean crop isn’t gonna make it to that 4.35 billion.”  He says, “A lot of analysts are saying it’s gonna be closer to 4.2.  If you take that equal amount off our carryout, we’re down to 140 million bushels, where we have to have significant rationing.”

He says that’s offering support to the market and making up for China’s lack of soybean purchases.

“It isn’t so much that China hasn’t bought from us. They haven’t bought from us yet.”  He says, “China still needs 400 million bushels of soybeans from now until January. The thing is, we’re starting to become the only source they can get them from.”

Setzer says the lack of an October supply and demand report, as well as other data from the USDA, is having an impact on the markets.

“Until we can get official news that China has bought, or we can see alterations to the U.S. balance sheets, the trade is going to trade what they have, and it’s the September numbers, and those were still pretty optimistic,” he says.

He says most farmers are storing as many soybeans as possible in hopes of market-moving news in the weeks to come.

AUDIO: Karl Setzer – Consus Ag Consulting