Trader Dan Norcini
Take a look at the following chart of the August bean contract which is currently in its delivery period.
[...] The story here is the historically small old crop carryover or ending stocks. With what is expected to be a massive bean crop this year, strong hands have been holding the beans and refusing to let them go. End users who could not wait for the new crop to start rolling in have been forced to pay outrageous prices for these beans to the point that the bull spreads have run the August to an incredible $2.40 premium to beans for November delivery.
We are going to get reminded of the tightness of those ending stocks in tomorrow’s USDA report and that has kept selling pressure from intensifying in the rest of the bean complex. With basis weakening however, it did make one wonder if today might have been the last hurrah for the crushers or those who are having some great fun at the expense of the trapped shorts in the nearby August.
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