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Advisor

soybean prices?

Can somebody explain to me why soybean futures prices have come up at all?  Sure the price of corn has risen due to the poor weather but the prospects for any improvement in soybean demand have been dashed by the complete collapse of trade negotiations.  The fact still remains that we have 1.2 billion bushel bean carryout and no prospect for any significant sales to China this year.  And 84 million acres of soybeans is still about 20 million too many to even begin to get supply and demand back in balance.

  Sure, later planted beans will probably yield less but it's more than likely that more than a few million acres not planted to corn will go to beans despite some producers taking corn PP.  And worse yet, the trump administration talk of more MFP just encourages producers to plant beans.

  So where does the optimism come from? 

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9 Replies
Veteran Contributor

Re: soybean prices?

Riding the optimism of the corn market. Funds are removing their shorts from soybeans, wheat, corn likely taking profits and switching their position to a long after running them down. 

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Advisor

Re: So, at some point.....

So, at some point the reality of the soybean situation will return?

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Veteran Contributor

Re: So, at some point.....

That's what I'm thinking. Trade deal could be a bear trap though, all depends on how much trust you have in Trump to deliver a trade deal. I'm betting he may hold off until after the election, but who knows? I don't even think Trump does. 

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Veteran Advisor

Re: So, at some point.....

As somebody already said, the beans are just riding the wave of the corn market. Looking at current weather maps I'm thinking we have several million acres of PP this year. Just looking at my area of Southern Michigan/Northern Indiana I would say farmers will plant their biggest most profitable fields and take PP on those small wet fields that don't make much money anyway. China has a major problem with pork production at the moment. Most "experts" believe China has lost 50% of its hog herd to ASF, so trade war or no trade war, soybean exports to China would be slowing down anyway.

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Honored Advisor

Re: soybean prices?

Well, with late planting, after May 20th, there`ll be a lot less elbow jacking cockiness about 80 bushel bean yields. True a guy mudded in beans June 10th and it made 70 bushel...and yeah a guy once  killed a deer with a .22 too.  

 

But let`s say this weather deal has legs, calendar pages turn but no wheels in the field turn and they even talk about prevent plant beans?  Let`s say instead of trend yield talk of 55 bushel national average trend yield, the trade talk becomes more around 40 bushel beans. Quick figuring 10 bushel less yield on 80 million acres, that`s a 800,000 hit to the alleged "1.2 billion bean carryover".   So the bean carryover becomes 400 million. in that circumstance, beans would have a story. 

 

Don`t know if it`ll happen, but this is the way it starts. 

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Advisor

Re: Yes, that's a possible scenario but....

Yes, that's a possible scenario but remember, even if you lose 800 M bushel off the top and cut that carryout down to 400 M, you still lack 30 MMT or 1101 M bushel of next year's demand.

  I agree a short crop will go a long ways to trimming the surplus but not far enough fast enough.

  Besides, around here, poachers shoot deer every day with a .22 and flashlight. You just have to aim right between the two shiny eyes.

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Senior Contributor

Re: soybean prices?

As long as the payments on soybeans actually happen and are between 3-5$ per bu. I’m fine with the county average of 46bpa. Never seen over 50 around here on any year. At least not long enough to raise the average.
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Highlighted
Honored Advisor

Re: soybean prices?

Why isn’t pork price at the store higher?
If we lost a large share of the worlds pig production.
Why did China buy record amounts of beans from brazil?

A lot of assumptions are riding on the bean market. And assuming a 55 bu yield is maybe the biggest out of whack assumption.
The market isn’t as reliant on projections as allways assumes.
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Veteran Advisor

Re: soybean prices?

Hog prices are near a $1.00 a pound on the board. With a stable supply of pork in this country maybe that is keeping prices down here in the U.S. China has a 60% tariff on U.S pork so we (the U.S) are not exporting all that much. Just my $0.02 

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