March Soybeans Harvest High and Low – 9/15/2022

In the September 2022 WASDE report USDA forecast the new crop US soybean carryout at 200 million bushels or 4.5% of usage which is very close to a minimum pipeline supply. The accompanying scatter studies display the harvest high and low for March soybeans as a function of the USDA’s September new crop carryout to usage forecast. The data in the scatters extended back to 1973/74, the first year monthly USDA S/D estimates were available.

Note that recent year’s data read high on the scatters reflecting inflationary pressure. Also, soybean oil values have been  inflated by use in biodiesel. March soybeans will likely make an autumn high between $16 and $18 assuming normal south American weather and $18 to $20 should South America suffer a repeat of last year’s crop problems.  

 On the negative side, soybean market traders must consider the crop year in South America as the Brazil-Argentina-Paraguay soybean crop is larger than US soybean production. The critical time for South American  soybean production is November  through February. The Southern Oscillation index suggests a strong La Nina phase this fall (Austral spring) which is sometimes associated with drought in South America. The current SOI is a positive for soybean prices because during the El Nino phase of the SOI Brazil in particular always enjoys a big soybean crop.