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03

Will beans go higher?

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Will beans go higher ? I think the bean story is one that could explode further based on the days of supply projections already out there. If you look at 75 days of supply in current USDA world projections, a failure or sub-par on yields in the US would put days of supply tighter than 2012. An over performance in demand achieves the same effect – what will a combination of both mean to foreign buyers who already see U.S. prices at a big advantage over Brazil offers?

With the dryer forecast issued by NOAA this week, we have to think the specs will be willing buyers on breaks or upward technical breakthroughs. U.S. speculators, end user and growers should consider NOAA official reports are too late for most traders - by the time they issue an alert the patterns are already in place. When NOAA officially says we have a La Nina, will La Nina weather patterns already effect growing conditions? If not in 2016, then certainly in 2017. .

Foreign buyers also know a 2016/17 La Nina growing season in S. America adds upward price risk to 2017 prices. If we already know world bean supplies are even with those seen in 2012, how important will bean production be in 2017?

Surely beans are overbought but sometimes an ideal, easy, no brainer buying opportunity never comes along.

On Tuesday, July beans put up an outside reversal to poke through $11 - Further resistance is thin until $11.50 with support at $10.80 and $10.70.

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