The United States is expected to produce its largest soybean crop in history this year. And managed money funds and professional traders that speculate on the soybean market are delivering a clear message. They think prices will go down before rising. 

Robert Harper, grain division manager for the Virginia Farm Bureau Federation, says soybean farmers must take this into consideration as harvest approaches and they make selling decisions for the 2024 crop. The soybean price outlook is more bearish than bullish. 

“Two months ago, for the first time in history, the managed money funds, the professional traders that bet on price direction had the largest short position on the Chicago Board of Trade in history, so they were telling you all loud and clear as clear as they can say it that they think the price of beans is going to go lower before it goes higher,” Harper said at the 2024 Soybean Field Day, Sept. 12, at the Eastern Virginia Agricultural Research and Extension Center in Warsaw. 

Harper noted that last year at this time, on various futures contracts, soybean prices were roughly $3 per bushel higher than they are today – devastating for soybean producers with stagnant input costs.  

Just after Harper’s field day presentation, USDA released its September crop report and World Agricultural Supply and Demand Estimate (WASDE) report.  

USDA forecasts U.S soybean production at a record high 4.59 billion bushels in 2024. Based on conditions as of Sept. 1, USDA forecasts yield to average a record 53.2 bushels per acre. USDA forecasts area-harvested for soybeans at 86.3 million acres. 

“Obviously the speculators knew that you planted a lot of soybean acres back in the spring. They get the crop progress reports every week. They see how healthy the soybean crop is across the big production states. Prices have been trending down, and those professional trading funds that bet on price direction have been selling soybean futures for about a year,” Harper said.  

“Most people think that the bottom is not in yet for soybeans. You as a grower know what your input costs were. You’re estimating your yield right now. You know about where your breakeven is going to be. Look at local basis; look at the futures market. If you can lock beans in today above your break even, you can make sales today,” Harper advised.  

Global impact 

Harper said it is important to remember that the soybean market is complicated because soybeans are globally traded which impacts prices Virginia soybean farmers receive for their crop. 

For example, last year, a leaf hopper outbreak devastated the corn crop with a disease that stunted much of Argentina’s corn crop. Because of the leaf hopper outbreak in corn, Argentina is expected to plant more soybeans than corn this year. 

Brazil is expected to plant 110 million acres (converted from hectares) this year. The country recently surpassed the U.S. for the spot of number one bean producer. 

In addition, reports indicate that China has a huge soybean stockpile in anticipation of the 2024 U.S. presidential election results – a huge amount of that purchased over the past two months from the U.S. and Brazil. 

“They broke a record in August from buying beans from Brazil and from the United States. If you dig into this, they are preparing for who the next president of the United States will be. We remember the last time that the Trump administration was in office. The massive tariffs on what was imported to the U.S. from China was devastating in the short term for soybean futures contracts,” Harper explained. 

The record U.S. soybean crop this year remains a key factor in the bearish price outlook. Harper noted that high production costs for corn last year drove much of the increased soybean acres this year. This year is only the fourth time in history that U.S. farmers planted more soybeans than corn. 

Harper encourages soybean farmers to keep a watchful eye on Brazil. 

“The main bullish influence that you have on upward price movement right now is if they can’t get the crop planted in northern Brazil and central Brazil, and they get it planted and the weather doesn’t go right,” Harper said.