Did the bears win the latest soybean price battle?

Did the bears win the latest soybean price battle?

Soybean bears also won a battle yesterday as the USDA elected to aggressively raise their yield estimate higher form 48.9 to 50.6 bushels per acre.

In turn U.S. soybean production was forecast higher by +141 million bushels. Total production is now forecast at a record 4.20 billion bushels, up another 3 percent from last month and up 7 percent from last year. Demand was bumped higher as well but it was simply not enough to offset the gains in production.

In fact new-crop ending stocks were actually raised higher by +35 million bushels, despite higher estimates for both exports and domestic crush. From my perspective the U.S. soybean crop looks looks really good, but I'm wondering if this might be the highest estimate of the year as more widespread disease complications are being reported in some very high production areas.

I have a hunch the top-end of the bean yield could start taking a few steps backwards in some important areas as we move forward. As a producer I want to stay patient in regard to pricing any additional bushels, at least for the moment.

I suspect as long as yield estimates and crop-conditions stay this elevated price rallies could be extremely limited. I'm hoping once we get deeper into harvest and the media starts reporting more on the disease complications out in the field, the yield might start to be talked a bit lower.

In other words this might be the highest soybean yield estimate of the year. I'm also thinking we eventually start to see more headlines develop around upcoming South American weather uncertainty.

Below are some of the additional highlights from yesterdays USDA soybean data:  

 

  • World soybean production raised from 312.7 to 330.4 MMTs 
  • Brazilian soybean estimate left "unchanged" at 96.5 MMTs
  • Argentine soybeans raised slightly higher from 56.5 to 56.8 MMTs
  • China soybean crop raised higher from 12.2 to 12.5 MMTs. Chinese soy imports surprisingly lowered from 87.0 to 86.0 MMTs 

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State-by-State Yield Changes: Below is the USDAs most updated yield estimate for soybeans on a state-by-state scale. The Illinois and Kansas crop was raised higher by +4 bushels per acre; Indiana, Kentucky and Tennessee yield raised +3; Arkansas, Michigan, Minnesota and North Dakota +2; Iowa, Missouri, Ohio and South Carolina +1. The Virginia yield was lowered by -3; Georgia, North Carolina, Pennsylvania and Texas were lowered by -1 bushels per acre. 

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