November soybean futures have rallied nearly 70 cents in just three short weeks as the late August extreme heat may have stressed the U.S. Midwest soybean crop more than anticipated.

What’s happened

As the temperatures inched higher, so did prices. Managed money funds began to exit their record net-short soybean positions, lifting futures prices along the way.

Adding to the positive price momentum, from a technical perspective, Nov. 2024 soybean prices have been able to climb above a three-month downward price channel, with November futures sitting comfortably above $10 as of this writing.

From a marketing perspective

With the recent heat, the notion of a record soybean crop is now in question. The market had been pricing in 53.2 bushels per acre for yield according to the August USDA WASDE report. Also, trade had already been pricing in a large U.S. soybean carryout number of 560 million bushels. The market knows there is a big crop out there, but potentially not as large as previously anticipated.

That overall notion of a robust U.S. crop likely will fundamentally keep the market from rallying sky high. Yet, that exceptionally bearish sentiment may be on hold in the short term as the soybean market is now looking for "future news." (Hence, why they call it the futures market.)

Future news and questions to contemplate that could affect soybean prices include:

Prepare yourself

The month of September can bring extreme volatility in soybean prices. Traders will turn their attention to the upcoming Sept. 12 WASDE report, weather forecasts in both the United States and South America, and any sign of increasing demand for U.S. soybean exports.

Regardless, this recent 70-cent rally is likely a welcome blessing for many producers who may have beans yet in the bin to sell, or beans they are looking to sell off the combine.

Keep in mind, unless U.S. soybean yield suddenly is less than 50 bushels per acre, there is still an ample U.S. soybean crop out in those fields. And the expected 2024 crop could potentially keep a lid on any further significant price rally in the short term.

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

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