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Will soybean prices sink to $9?Will soybean prices sink to $9?

Ag Marketing IQ: Futures prices are weighed down by global ending stocks bigger than U.S. production this year and record harvest expectations in Brazil.

Naomi Blohm, senior market adviser

December 19, 2024

4 Min Read
Soybeans covering up ten dollar bill signifying dropping price.
Getty Images/kool99

It seems, the Christmas rally for soybean futures only amounted to a mere 25 cents this year. A far cry from the average rally over the past decade which was closer to 90 cents.

What’s happened

The December USDA WASDE report was the nail in the coffin for prices as the balance sheets continued to show record global supplies.

Projected U.S. 2024-25 ending stocks didn’t budge, coming in at 470 million bushels. By comparison, the ending stocks for the prior crop year were pegged at 342 million bushels.

Dec_19_US_Soybean_Carryout.png

The bigger negative fundamental for soybean prices, however, stems from the record carryout levels at the global level. Global soybean ending stocks for the 2024-25 crop year are at a resounding 131.87 million metric tons. The largest in history.

Dec_19_World_Soybean_Carryout.png

To put that in perspective, that global ending stock number of 131.87 mmt, is slightly larger than the entire U.S. soybean crop harvested in 2024. To compare, the USDA has U.S. soybean production pegged at 121.42 mmt, or roughly 4.46 billion bushels. Let that sink in.

From a marketing perspective

The crop recently planted in Brazil is expected to be record large. Weather issues for that country have been very limited. The most recent USDA report has Brazilian soybean production for the 2024-25 crop year pegged at 169 mmt, up from 153 mmt last year.

2024/25 World Soybean Production pie chart

Not helping is the currency exchange rate. The U.S. dollar has rallied since October 2024 while the Brazilian real fell lower during that same time frame. This is making it cheaper for other countries to want to buy Brazil soybeans (not U.S. soybeans) due to the currency exchange rate.

Continuous weekly chart of U.S. dollar vs. Brazil Real currency

Prepare yourself

Time to get real. The weight of abundant global supplies has recently triggered selling of soybean futures contracts.

From a technical perspective, and with hindsight, a potential “head and shoulders formation” occurred on daily March 2025 futures charts. This head and shoulders formation is often interpreted as a “topping signal” which can measure what the potential price breakout to the downside might be.

In this case, the technical indicator suggested that a $1 price breakout to the downside could be a possibility.

Head and shoulder formation on March 2025 soybean futures

This might take March 2025 soybean futures down toward the $9 price area over the course of the coming weeks.

What could turn this market around? It would take a flash of fresh friendly demand news, a sudden turn of the weather in South America, good news on the biofuels front, and a lack of trade wars come January with the new administration.

Challenging to say the least. Stay defensive for now but watch for potential opportunities that may occur in the New Year.

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

Disclaimer: The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation.

About the Author

Naomi Blohm

senior market adviser, Total Farm Marketing by Stewart Peterson

Naomi specializes at helping farmers understand how to manage cash marketing needs and understand the importance of managing basis, delivery point considerations, cash flow needs and storage capacity. She earned her Bachelor of Arts in Political Science with a minor in Agriculture Business at the University of Wisconsin in Platteville. She has a Master of Science in Adult Education with an emphasis in Ag Economics from the UW-Platteville and a Master Certificate in Global Education, from the UW-Oshkosh.

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