It was a wild month for soybean traders who were watching the big board in Chicago.
Soybean prices cratered leading up to the final days of March. However, as we had long advocated, the bull rally still had legs and just needed one more positive number to help propel prices back to solid gains. That number came Thursday when the USDA forecasted that soybean acreage would come in around 89 million acres.
That number stunned analysts, many of whom projected that U.S. soybean acreage would surpass 92 million acres. As a result, soybean prices surged on Thursday and brought total returns for the month of March back to respectable levels.
Here’s a breakdown of the action on the contracts that we’re watching this month:
- May 2018: -1.0% or -10.7¢ to $10.448 USD / bushel
- July 2018: -0.8% or -8.8¢ to $10.555 USD / bushel
- Nov 2018: +1.5% or 15.5¢ to $10.478 USD / bushel
- Jan 2019: +1.4% or 14.0¢ to $10.498 USD / bushel
And this quarter:
- May 2018: +7.4% or 71.8¢ USD / bushel
- July 2018: +7.3% or 72.2¢ USD / bushel
- Nov 2018: +7.4% or 72.0¢ USD / bushel
- Jan 2019: +6.8% or 66.8¢ USD / bushel
Thursday’s big acreage announcement overshadowed concerns about rising stocks. On March 1, the USDA reported that soybean stocks had surged by 21% from March 2017.
There are an array of competing factors in the soybean complex. On one side we have concerns about Argentina’s falling crop number and the smaller U.S. production expectations. On the other side, we have a huge amount of inventory mixed with a possible trade war with China and an expected record Brazilian crop that is tickling the 119 MMT level.
This month, we dove into these factors. Specifically, we looked at:
- The forecasts for U.S. soybean acres and the impact on prices.
- Trade war talk, and why China won’t stop importing soybeans; and
- What we can expect from production and exports in Argentina and Brazil.
Be sure to sign up for your free 3-week trial at GrainCents as this month could be the most impactful for how and when you price your soybeans for the rest of 2017/18 old crop supply, as well as a significant portion of your 2018/19 supply.