Weekly Soybean Review
Late spring could add bean acres.
Bryce Knorr
Published: May 17, 2013
New crop soybeans have definitely played second fiddle to old crop this spring, with a squeeze on May futures sending it to the highest price for a nearby contract since November. But November is showing a few signs of life, too, after slamming the door on a test of $12 this week.
Seasonal trends are at least a little supportive for November, even in the year after a bull market. Prices can fade into June but don't completely fall apart that soon for good, typically getting some type of pop later in the month
November 2013 certainly is getting some juice from old crop, but there are other reasons why new crop may not be ready to give up the ghost just yet. Demand from China remains strong, and other end users are eyeing the latest problems from Brazil as symptomatic of a country that may not be the most reliable trading partner right now. With average yields and acreage from USDA's March planting intentions, the top of my projected selling range right now is up to $13. So there's room for upside, if November can confirm this week's break above its trendline off previous February-May highs.

Late spring could add bean acres.
Yet there's also good reason why November was bumping along close to another test of $12, even if yields aren't as strong as the normal trend yield USDA forecast in its May 10 report off 44.5 bpa. Years of very slow corn planting typically see an increase in soybean acreage, which could add up to 3 million more acres when all is said and done. In addition to corn ground switched, some spring wheat acres likely will end up in beans, too. Winter wheat harvest is late this year, which may hold back what otherwise would be a strong double crop program. Moreover, our Farm Futures survey in March found farmers wanting to plant more beans than USDA found, another reason to expect an increase in USDA June 28 acreage report.
As a result, growers shouldn't get too comfortable with the inevitability of November futures rallies. With prices still well below the Revenue Protection base price, there is not a tremendous urgency to heavy sales yet. But growers who didn't follow our earlier recommendations to get 25% of the crop priced at just under $13 should be figuring how much they need to lock in at what level to cover bushels above the RP guarantee.
While the July/November spread moved to new highs Friday, old crop rallies should still bring new along for the ride. July looks like it has potential to test the $14.85 level after surging above its 200-day moving average Friday. Those who still have old crop beans left in in for a thrill ride, with a move by July above $15 giving them a profit from storage if basis holds up.
You can download the complete report using the link below.
Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Adviser. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.
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Tagged: usda, winter wheat, soybean acreage
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