It was a bit of a mixed message for soybeans in USDA’s June 2024 Grain Stocks and Acreage report released in late June with a drop in planted acres catching traders by surprise, and then soybean stocks were raised a bit higher.
“We ended up with soybean acreage a little bit lower than we expected it to be. Unfortunately, stocks were a little bit on the high side,” said Betsy Jensen, Northland Farm Business Management and a producer/marketer from Stephen, Minn. “It was a small surprise for soybeans. We didn’t think that acres were going to be as low as they were.”
USDA pegged soybean planted area for 2024 at 86.1 million acres, up 3 percent from last year, but down 400,000 acres from March intentions and over 700,000 acres less than the trade had expected.
Initially, after the report came out, it sent the soybean market higher, but that rally didn’t last as soybeans traded lower into the close.
“Overall, I think it was a little bullish for soybeans, just because we lost about 400,000 acres from what we had expected,” she said.
However, at the time of the survey, there were still over 12 million acres of soybeans to be planted, so there could be some revisions higher down the road, as massive flooding moved across parts of the Northern Plains and Upper Midwest.
Also in the report, June 1 stocks were pegged at 970 million bushels (MB), about 13 MB higher than the trade had expected and 174 MB above a year ago. That could be termed “neutral to slightly bearish” for beans.
“I’m not going to say soybeans are bullish, they’re not bullish, but they’re not nearly as bearish as the corn market at this time,” she said. “Yes, (prices) have gone down, and yes, we are setting new contract lows unfortunately, but they’re doing a little bit better than the corn market.
“We had a good rally in May, but we’re about $1.30 under that rally, and the soybean market has gone down,” she added.
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Still, there is some optimism in Jensen because soybean yields are generally set in August and things could change along the way.
“We can have great crop conditions in July, but if it turns hot and dry in August, those bean pods don’t fill. So there still is a chance for weather problems in the soybean market,” she said. “I won’t say soybeans are a dead horse at this time, but losing $1.30 is tough to swallow.”
As of the start of July, the 2024 soybean crop was still looking good overall.
“Crop conditions are just incredible. It’s a good-looking crop out there,” she said.
On the demand side, Jensen said exports are about 3 percent lower than a year ago, though that’s not a terribly significant cause for alarm.
“No one is concerned about soybean export sales at this time,” she said.
As of the start of July, soybean prices still had a “10” in front of them, but it’s getting close to dropping below the double-digit starting point.
“Right now, locally for new crop, we’re at $10.15 for soybeans. It’s not good, so that’s not anything we want to brag about at this time,” she said.
Local prices are well below $11 now in many parts of the region. At one local elevator in west central Minnesota regularly followed in this column, as of July 1, cash soybean prices for July delivery were posted at $10.66 and basis was -70 cents under. The December 2024 futures price was $11.16, and basis was -2 cents under.
“It’s understandable why farmers want to shut their bin door and ignore it, and I don’t blame them, but it’s premature to say that prices can’t go lower, because prices can go lower from here. I know we’ve already dropped quite a bit, but prices can go lower. So just keep that in mind when you’re talking about risk management,” she said. “I’m not sure how much farmers have sold for new crop, what they have hedged, but we are in kind of a risky position right now.
“Just remember, there still is a chance for crop conditions to cause problems in beans. We’ve seen it before. It is a possibility, so soybeans maybe will have a rally. Soybeans have a little longer window until we know what the yields are going to be,” she concluded.