Nov ’24 soybean futures finished the month of June, the day of the Acreage and Quarterly Stocks report, at $11.04. It’s been seven weeks since that day, and Nov soybeans have made new contract lows at $9.55 with a new low settlement price of $9.57.

The August WASDE report showed the largest ever monthly increase in soybean stocks from one month to the next at 125 million bushels. This jump in stocks is despite an increase of 25 million bushels to export demand, a move that is likely born out of protocol and not reason. Generally, when USDA raises production on the balance sheet, they will partially offset the production increase with a demand increase, which in this case came by way of exports.

As time progresses and the USDA focuses more on pace analysis, the export demand estimate will look borderline foolish unless China comes in to buy in a major way. While China has been actively buying new crop soybeans over the last several weeks, our total book of sales is still anemic and nowhere near what we need to have sold to be on pace to hit USDA’s marketing year objective.

As Brazil’s soybean crop production reaches new records, it expands the period where China can continue to buy from our South American competition before filling in the gaps with U.S. soybeans to get them covered into the next Brazilian harvest. Estimates for upcoming Brazilian soybean production currently hover around 170 million tons.

We’ve discussed analog comparisons to other years in this blog, and the periods of 2010-14 are still running very close to 2020-24 at this stage of the year. The next natural progression of the thought process is to look ahead to 2025 and see how 2015 looks in comparison. This is a sobering exercise when put into practice based on the chart below:

A concerning implication we can draw from this analog comparison is strikingly evident when looking at the chart. Once the Nov 2015 contract moved below $10.50, as Nov 2025 soybeans did last week, it only saw the price of $10.50 one more time during the fall of 2014 and then never again. From this stage forward, futures plummeted into the end of September 2014 before making the fall low, something we’ve discussed at length regarding the 2024 versus 2014 comparison.

You got one bounce from the fall low to a November high that tested $10.50, and one more shot close to $10.50 during the summer peak of 2015. That was it. No test of $11. No dreams of beans in the teens.

And you might recall me saying, beans do not like the price of $11. When beans are below $11 for a period of years and they break through to the upside, we see beans in the mid- to upper teens. When beans are above $11 for a period of years and they break through to the downside, we see beans eventually trade with an $8 handle.

The month of July saw front month soybeans trade below $11 for the first time since November 2020, suggesting a repricing event was in store. We already have September futures at $9.3875  to finish the week. It happened fast.

What I implore you to consider is what action you might take if the analog comparisons to a decade ago continue. Because if it does, your marketing opportunities for next year’s soybean production may not be much better than current levels.

What if the best opportunity for next year’s soybean production is three months away during a brief South American weather scare?

For hedge ideas, price targets or to just shoot the breeze about the market, feel free to contact me directly at 815-665-0463 or anyone on the AgMarket.Net team at 844-4AGMRKT for assistance. We are here to help.

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