November – September Soybeans – 06/04/2022

On June 3, 2022 September soybeans closed 33 cents premium to November soybeans. Historically, the November – September spread has been a function of the US soybean carryover relative to crop year usage. The drought in South America last winter (Austral summer) created a surge in demand for US soybeans and support for old crop soybeans relative to new crop soybeans. In similar tight old crop stocks years the November/September spread has moved toward carrying charges as the old crop US soybean supply/usage balance becomes clear.

The hazard to carrying charges this year is a possible surge in old crop US soybean sales if old crop prices appear cheap while waiting for new crop soybeans. Historically a weather market has benefited new crop soybeans more than old crop beans.

Note the point marked in red is the USDA May soybean supply/usage estimate for the 2021/2022 crop year and the spread close on June 3. 2022. USDA will make adjustments to supply/usage forecast this summer. In most years old crop summer adjustments have been minor with most of the focus on new crop soybean prospects.