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Corn+Soybean Digest

SOYBEANS: History Being Made


No one needs to remind soybean producers that soybeans have been in the midst of the biggest bull market in history. Hopefully, it's still going on by the time you read this. If not, a look back at past historical bull moves in soybeans might be very revealing. The table below summarizes the past bull markets whenever soybean prices went higher than $9/bu.

As I write this article in early March, this bull market is already the longest-running ever in soybeans. Measuring from the day when the acceleration of the bull market began to the absolute peak, as of March 1 this market was already 146 trading days long. As you can see by looking at the table, the 1980 bull market lasted 108 days and the 1997 bull market lasted 103 days. The shortest bull market in history was in 1983, which from bottom to top was only 41 days.

The magnitude of this bull market is not much different from many in past history. In late February, July soybean futures moved from a low of $5.20 to a peak of $9.19 -- a 76% price increase. The 1997 bull market was only a 33% increase in price, whereas 1988's bull market was at 78% and 1983's at 60%. The only other bull markets that exceeded this are 1974's, which was an increase of 85%, and 1973's -- the first and biggest in history -- when soybean prices more than doubled.

As this column goes to press, you can find forecasts on the Internet as well as in coffee shops that soybeans in this move will go to at least $14. Some forecasts are even higher. Anything is possible in a bull market when we have the lowest stocks-to-usage ratio in history -- currently pegged at 5%. Even in past bull markets, domestic supplies have never been this tight.

Another argument on the bullish side is that we are currently trading on the shortage of the U.S. and Brazilian crops. In mid-February the Brazilian government lowered its estimate of this year's crop. It's widely anticipated that the crop production numbers will be lowered again. But let's keep in mind that, worldwide, there is still no pressing shortage of soybeans.

As I have said in this column before, don't try to pick tops -- sell frequently and in small increments. Remember your bottom line when tied up in the emotional potential of this market. A price of $7-plus soybeans off the combine, doesn't come around very often. Sell to guarantee yourself a profit and speculate on what's left. This market is close to a top -- and this will be a year we'll all remember for a long time.

Richard A. Brock is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report. For a trial subscription and information on Brock services, call 800-558-3431 or visit

Consider These Bull-Market Factors

Emotions are running high in the current bull market. No one wants to miss the top, and the majority of producers are upset about having sold old-crop too early. That's the case in every bull market.

Let's look at some key factors that should help in making decisions over the next few weeks:

  1. From a farm management perspective, prices are very profitable. You can't get hurt selling new-crop beans above $7/bu.

  2. Prices will likely peak earlier than in past bull markets. April and May have each claimed one major top, while June has claimed two. The others have come during fall. Since this is already the longest-running bull market, and supply driven bull news gets built into prices quickly, I would anticipate a top before Midwestern planters start to roll.

  3. The bigger the bull, the bigger the bear! Don't forget it. This big bull will turn into one huge bear and leave no survivors at the top.

  4. Once the top is complete, these will be the highest-priced soybeans that we'll see for at least the next five years. There is no such thing as a flat top in this type of a market.

As in past bull markets, this is going to be straight up, followed by straight down.


Date Of Peak Price Beginning Price % Change Trading Days From Bottom To Top
June 1973 $12.90 $5.06 154% 46
Oct. 1974 9.56 5.16 85% 82
April 1977 10.76 6.17 74% 45
Nov. 1980 9.56 6.39 50% 108
Sept. 1983 9.60 5.88 60% 41
June 1988 10.59 6.16 78% 71
May 1997 9.03 6.77 33% 103
? 2004 ? 5.20 ? 146
(as of March 1)
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