Sometimes it seems like the theme of this crop marketing year for soybeans has been, and continues to be, “Hurry up and wait.”

Looking back since January of this year, there have been a few times that the November 2022 soybean prices marked time and entered into a price consolidation phase. Without fresh news, soybean prices paced back and forth in trading ranges, waiting for that next piece of fundamental information to justify a price breakout move either higher or lower.

So far, those price consolidation patterns have led to higher prices.

And now here we sit again, for nearly one month, November 2022 soybean futures have been meandering back and forth in an approximate 70-cent trading range waiting for fresh news. Based on technical chart formations, the next potential breakout move for soybeans looks to be either $1.50 higher or $1.50 lower. Which direction depends on if the upcoming market information received is perceived as bullish or bearish to the market.

Thankfully, that fresh news will be available soon as we are waiting for two pieces of crucial information: the June 30 acreage report, and weather.

June 30 acreage report

On the prospective planting report in late March, the USDA suggested 91 million acres of soybeans would be planted in the United States this spring. Up from 87.2 million acres the year prior. With domestic and global demand strong, there is a true need for that additional acre increase.

Trade will be quite curious to know what the acreage number will say on the June 30 report, especially with the entire U.S. soybean crop not yet planted due to a soggy spring in North Dakota and Minnesota. As of this week’s crop progress report, only 88 percent of the U.S. soybean crop has been planted.

North Dakota is still struggling and is suffering the slowest planting pace on record and still has 1.75 million acres left to plant. In Minnesota, there are still 960,000 acres to plant. Combined that equates to 2.71 million acres not planted, and will they get planted?

Prior to this soggy spring, some were suggesting that due to high chemical and fertilizer costs, soybean acres could be even larger than the 91 million acres suggested by USDA in March. The bottom line? We don’t have a clue at this moment what that acreage number will be.

Even so, here are a few scenarios of what ending stocks would look like based on different acreage possibilities.

Using the demand numbers, yield and carry-in numbers suggested on the June 10 WASDE report, if planted acres are kept at 91 million acres, then ending stocks are pegged at 280 million bushels. If soybean acres come in smaller, at 90 million acres, then ending stocks would be pegged at 229 million bushels. Should acreage increase, up to 92 million acres, then ending stocks would come in at 332 million bushels.

Remember, the futures markets trade on perception. And if the perception is that ending stocks are getting larger, then prices will likely fall lower. If the perception is that ending stocks are getting smaller, then futures prices will likely rally higher.

Mother nature

Ultimately, weather has the final say. A hot and dry late July and August could zap record yield potential. Or an ill-timed hurricane could hit the Southern Gulf shores and shut down exports or slow harvest. Or, what if August weather is perfect, temperatures and sunshine timed with the right amount of rain at just the right time leading to record yields?

Be ready for anything that could affect the price of soybeans either higher or lower.

It seems as though a sense of complacency has hit the producer mindset, and that marketing has been placed on the back burner, because “surely prices will stay high.”  

With the extreme global geopolitical drama happening around the world, and the notion that inflation needs to be curbed quickly, there are outside market influences that could come in and become front and center stage to the soybean market.

Reach Naomi Blohm at 800-334-9779, on Twitter: @naomiblohm, and at [email protected].

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