Soybean bulls are talking about the same thing as corn bulls… a large winter storm forecast to hit the North and an extremely late-maturing U.S. crop. The USDA reported just 14% of the corp has been “harvested” vs. 34% on average. Iowa 5% harvested vs. 26% on average; Illinois 11% harvested vs. 40% on average; Minnesota just 8% harvested vs. 43% on average; South Dakota just 5% harvested vs. 36% on average; North Dakota 8% vs. 48% on average; Nebraska 14% vs. 30% on average; Kansas 5% vs. 15% on average; Missouri 6% vs. 18% on average. The USDA showed just 72% “dropping leaves” vs. 87% on average. I should also note, the USDA lowered its weekly crop-condition estimate from 55% down to 53% rated “Good-to-Excellent”
vs, 68% rated GD/EX last year. In Brazil, producers are off to their slowest planting pace in over five years, which is adding a bit more uncertainty to the mix, especially in regards to second-crop acres.
Looking forward it’s now all about Thursday’s USDA report and the end of week U.S. and Chinese trade talks. If the market is disappointed by the headlines the recent gains in price will be in question. On the flip side, if the headlines can confirm the more recent bullish tilt we could quickly challenge the mid-June high set in the NOV19 contract at $9.48 per bushel. As a spec, I continue to hold a small bullish position. As a producer, I like the thought of buying some puts as downside protection or a type of safety net if things don’t go as planned, but I want to keep my upside open. I’ve been waiting for an extended period of time for this setup i.e. South America running low on supply and uncertainty in the air regarding the U.S. crop, U.s.
harvest, and upcoming South American weather. I want to be paying very close attention these next few weeks as this could be our window of opportunity to price or reduce risk on a large portion of our soybean production.