Sept 16: WASDE Soybean Yields Point to Record Crop

The soybean yields estimate in the latest September WASDE report points to a bumper crop for soybean producers. But do the USDA’s numbers line up?

Current Sales Position:

We are 80% sold in 2017/18 old crop soybeans.

We are 20% sold in 2018/19 new crop soybeans.

Post Your Soybeans


Good morning,

Soybean prices continued to slide in the wake of a bearish WASDE report that showed record US soybean yields and, thus, a record harvest. High soybean yields, high soybean production, and high soybean stocks kept prices in the red for the week. November contracts slipped 1.7%, while January contracts were off 1.6%.

Soybeans Futures Price Performance

Every major contract finished the week off more than 1%. With harvest pressures continuing, we want to dive into the major supply and demand factors impacting soybean prices.

CTOT Update

Given that the Commitment of Traders report offers data from Tuesday, we got a sense of how hedge funds were thinking about grain prices on the day before the September WASDE report.

This week, the CFTC said that hedge fund managers cut their short positions on soybeans by 8.8% or 5,520 contracts.

Soybean Futures Funds Position

Managed money is sitting on a net short position on soybeans at -68,269 contracts.

Money managers did increase their long position on soybean meal futures. Hedge funds added 8,733 contracts for the week ending September 11th. That is a 40% jump in contracts week-over-week to now sit on a long position of +30,134 contracts.

Soybean Meal Futures Funds Position

The reason for the increase is that soymeal demand continues to be strong and crush isn’t slowing. Explicitly, U.S. soybean crush has been up 9% – 15% over last year’s pace every month between February and July. In fact, March soybean crush volumes set a record for any previous month in any previous year.

However, this means that there’s a lot of soyoil being produced as well, but there isn’t as much demand for it. Thus, soybean oil futures didn’t receive the same bullish sentiment as their soymeal counterparts with speculators still sitting on a net short position of just under 100,000 contracts.

Soybean Oil Futures Funds Position

Soybean Yields Make Headlines

On Wednesday, the USDA released the September WASDE report, which offered a few key updates to the global soybeans crop.

The USDA projected a that U.S. soybean yields will average 52.8 bushels per acre (bpa). This is a new record and surpassed average trade expectations, as a survey of Reuters put estimates at 52.2 bpa.

However, it’s worth noting that the USDA did see a ProFarmer Crop Tour estimate of 53 bpa.

Prior to the report, there was some skepticism about the numbers retrieved from the crop tour, but today’s report appears to have vindicated these analysts.

While a record crop of 4.693 billion bushels of soybeans in 2018 made a lot of noise, it was the news that stocks would surpass already lofty trade expectations.

Going into the report, the market was quite bearish about stocks estimates. Analysts projected that 2018/19 ending stocks would top 800 million bushels in the U.S. and 100 MMT globally.

However, the numbers turned out to be even more bearish than analysts expected. Now only did U.S. stocks hit an astounding 845 million bushels, but global stocks popped another 2.7 MMT to touch just north of 108 MMT.

You can read our full recap of the September WASDE report for soybean farmers, right here.

Of course, it’s not just about what’s happening in U.S. fields that matters. After we dug under the hood, we picked up on a few key stories that went under-reported this week. Here’s our take on what you may have missed:

No Change in South America?

A surprise decision by the USDA was to maintain soybean production estimates in Brazil and Argentina. The USDA said that Argentina’s soybean production in 2018/19 will come in at 57 MMT. The Brazilian figure is still projected at a record crop of 120.50 MMT for 2018/19. They also maintained Brazil’s 2017/18 soybean crop at 119.5 MMT.  

Those numbers are a bit different than what we saw this week from other sources.

This week Conab in Brazil said the nation’s 2017/18 crop hiked their 2017/18 estimate by 300,000 MT to 119.3 MMT. That is the second highest level ever, although the USDA’s new crop forecast for the coming year will easily top it. Conab will give their first estimate of the 2018/19 Brazilian soybean crop next month.

Argentina’s Rosario Board of Trade is estimating 2018/19 soybean acres in the country at 44.2 million acres, up 1.3% year-over-year. This is an increase from their previous estimate though, as it was before the Argentine government implemented a tax change on September 3rd.

Thus, Rosario estimates total 2018/19 Argentine soybean production at 50 MMT, up significantly from last year’s drought-riddled production. However, it is still well short of the 57 MMT currently being forecasted by the USDA.

China’s Crush Situation is Problematic

The report also provided an interesting take on Chinese import demand. This week, the USDA’s attache said that China will import 94 MMT of soybeans. That figure was a 1 MMT cut from the previous month.

But it’s about 8 MMT more than the numbers we’re hearing out of China from analysts, crushers, and traders as the nation faces two key challenges.

First, the ongoing trade spat with the United States has pushed prices higher in South America, thus reducing demand. And second, the country’s livestock industry is facing a serious swine fever that has moved quickly through its herd.

The one positive development for China is that its crush margins from the U.S. are about to start turning positive since the nation slapped 25% duties on American imports.

That said, the USDA did cut Chinese crush expectations from 95 MMT to 93.5 MMT.

At the moment, U.S. soybean exports to China for the 2017/18 year are pegged at 28 MMT, down sharply from the 36.8 MMT that the nation reported in the previous calendar year. The agency said that it will be difficult to forecast new crop figures, which is especially true given the uncertainty around just how much soybeans the nation of China has in inventory and how much they will seek in terms of alternatives like canola.

The USDA did note that China expects to increase rapeseed imports in 2018/19 from 750,000 MT the previous year to 5.4 MMT. That’s just one source of substitution for its feed industry.

U.S. Soybean Exports

The USDA reported net sales of 693,500 MT in soybeans to start the 2018/2019 marketing year, which began September 1.

The agency said that it carried over 2.43 MMT of soybean sales from the 2017/2018 marketing year.

Exports finished the 2017/18 marketing year with an additional 242,500 MT in shipments. That brought the total export figure for the U.S. to 56.38 MMT. That figure was off 3% from the 58.12 MMT reported in the previous year in 2016/17.

To start the marketing year, the USDA said that the first week of exports came in at 895,800 MT.

US Soybean Cumulative Exports

The USDA said that top destinations for the nation’s soybeans were Egypt (136,300 MT), Iran (136,200 MT), Japan (82,900 MT), the Netherlands (70,500 MT), and Vietnam (69,800 MT).

Soybeans Crop Quality Update

The USDA reported the quality of the U.S. soybean crop last Tuesday, saying that 68% was rated good-to-excellent (G/E).

Soybean Yields: Crop Condition

That figure is up 2 points from the previous week and 8 points above the 5-year average. Going into Monday’s report, the soybeans quality rated G/E is usually 55%.

Soybean dropping leaves were reported at 31% last Tuesday, which is 9 points ahead of last year and 12 points ahead of the 5-year average. Going into Monday’s report, soybeans dropping leaves is usually 37%.

Keeping It Short on Trade

We’re not trying to talk too much about trade every week. I think there are two important reasons why.

First, it can be repetitive. And that’s not what we’re trying to do for you. When there are developments, we discuss them. When there are rumors, we dispel them if needed.

Second, and more important, we don’t have any control over what’s happening in Washington, Beijing, or Ottawa. We want to control what we can control. And we can control our grain marketing and ensuring that we’re positioned to get the best price during the marketing calendar.

With that in mind, let’s just keep you updated on the last week.

First, the U.S. is back at the table to discuss revisions to NAFTA with Canada. The U.S. already has a deal in place with Mexico. But they are going to need Canada.

As we said last week… President Trump cannot unilaterally make a call on trade without Congressional approval of a new deal. Too many Republicans will reject a change to NAFTA if he goes overboard. So, ignore the noise, and just hope that the backroom negotiators are able to bring a deal to the President that Congress will like.

Second, the U.S. is reportedly talking to China about a restart of negotiations around trade. It’s a tale of two economies right now, and China’s economy and stock markets are in the tank. The U.S. economy continues to see record employment and stronger consumer and business confidence. Trump should not mistake those matters, however, as leverage.

The world will benefit from cooperation and not competition. Farmers deserve better than this.

Where Soybean Prices Go From Here

Another month, another bearish WASDE report. And there is no sign of trade agreement on the horizon between the United States and China. But let’s make one thing clear.

Even if there is a trade deal, however, it’s not going to press soybeans back to the levels that we saw a few months ago overnight. The problem now is that farmers are exposed to a market awash in soybeans. A record harvest in the U.S. is only amplified by this ongoing trade crisis.

Ultimately, a deal tomorrow wouldn’t bring us back to $10.00, mainly because of the size and competition of the Brazilian crops. However, it would provide some additional cover to farmers who will access the USDA payouts offered last month.

If you are able to add the $1.65 per bushel on 50% of old crop, now may be the time to take the money and the profit and start turning your attention to the next planting season. Keep in mind that the November 2019 contract is now sitting below $9 as well but there is speculation by many that we are now on the lows.

Overall, we’re going to ride out the current trade talks and see just how much of an upside reaction we can get before we make that final move on old crop.

To growth,

Brennan Turner
President | CEO


306-715-4540 (cell)


FarmLead – North America’s Grain Marketplace




Sept. 12 – September WASDE Report: Record Soybean Yields Bring Record Crop

Sept. 9 – September WASDE Preview for Soybeans Prices –  Soybeans GrainCents Weekly Digest

Sept. 2 – Farmer Aid Fuels Soybean Price Slump – Soybeans GrainCents Weekly Digest

August 31 – 7 MMT of 2018 Canadian Soybean Production

August 26 – Stormy Soybean Prices – Soybeans Weekly GrainCents Digest

August 19– China on the Phone – Soybeans Weekly GrainCents Digest

August 16 – U.S Grain Export Prices Hit 6-Year Low

About the Author
Brennan Turner

Brennan Turner is the CEO of, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.