November Soybeans Mid-Summer Review – 07/18/2023

USDA cut the 2023/2024 US soybean carryout projection by 50 million bushels this month  because of a smaller planted acre estimate published in June Acreage Survey report. USDA stayed with a national average soybean yield of 52 bushels per harvested acre.

As we indicated in a previous post, the USDA’s trendline soybean yield forecast is attainable, but optimistic based on the USDA weekly crop indices. Soil moisture reports suggest there is enough moisture in the soil to support better weekly indices, although above normal temperatures, while not directly detrimental to soybean development, could reduce soil moisture below that needed to boost yields.    

We have included scatter studies which plot the mid-summer – harvest  price range for November soybeans as a function of the new crop US soybean carryout stocks / crop year usage ratio. The USDA’s July forecast and the close for November soybeans on 7/18/2023 are plotted as the red point marked 23. It appears traders have fully priced in the USDA July data with a major rally requiring a smaller crop or larger new crop usage. We view more robust usage   as unlikely due to the outlook for a very large Southern Hemisphere crop to be harvested beginning in February 2024.