Soybean Market Bears Hold A Strong Seasonal Advantage But Must Risk a Summer Weather Market.
This month the USDA forecast an increase in new crop (2024/2025) US soybean carryout stocks. For the next two months the key to possible changes in the soybean supply/usage balance is weather and the impact on yield. This month USDA assumed a national average soybean yield of 52 bushels per harvested acre which would be a record fractionally exceeding the current record set in 2016.
Based on crop condition data collected between 1985 and 2023, and the correlation between the crop index (percentage of US soybean crop rated good or excellent) at the end of the season and the national average US soybean yield, the index needs to be close to 61 percent to achieve a yield of 52 bushels.. Of course USDA assumed normal weather during the growing season in the June report, the heart of which runs between mid June and mid August. In the week of June 16, 2024 USDA rated 70 percent of the soybean crop in good or excellent condition. The index has a modest seasonal bias to decline during the growing period. An index of 70% in mid June equates to 62 percent at the end of August.
We have run a seasonal study for the November soybean contract using years in which the USDA forecast an increase in new crop soybean carryout stocks The November contract price declined more than advanced in 22 of the 30 study years.
| November Chicago Soybean Futures Prices | ||||||
| Change from mid June to July/December High and low | ||||||
| Year | Mid June | High | % High | Low | % Low | Bear = X |
| 1975 | $4.86 | $6.53 | 34% | $4.66 | -4% | |
| 1977 | $7.11 | $7.26 | 2% | $4.97 | -30% | X |
| 1978 | $6.24 | $7.31 | 17% | $5.86 | -6% | |
| 1979 | $7.81 | $8.33 | 7% | $6.25 | -20% | X |
| 1981 | $7.67 | $7.97 | 4% | $6.34 | -17% | X |
| 1982 | $6.43 | $6.50 | 1% | $5.18 | -19% | X |
| 1984 | $7.06 | $7.71 | 9% | $5.69 | -19% | X |
| 1986 | $5.00 | $5.19 | 4% | $4.65 | -7% | X |
| 1989 | $6.28 | $7.12 | 13% | $5.40 | -14% | X |
| 1990 | $6.23 | $6.81 | 9% | $5.52 | -11% | X |
| 1992 | $6.32 | $6.27 | -1% | $5.25 | -17% | X |
| 1994 | $6.84 | $6.75 | -1% | $5.27 | -23% | X |
| 1996 | $7.33 | $8.25 | 13% | $6.60 | -10% | |
| 1997 | $6.74 | $7.48 | 11% | $5.77 | -14% | X |
| 1998 | $5.88 | $6.57 | 12% | $5.09 | -13% | X |
| 1999 | $4.80 | $5.22 | 9% | $4.05 | -16% | X |
| 2000 | $4.97 | $5.16 | 4% | $4.46 | -10% | X |
| 2001 | $4.56 | $5.38 | 18% | $4.21 | -8% | |
| 2004 | $6.64 | $7.14 | 8% | $5.01 | -24% | X |
| 2005 | $7.21 | $7.70 | 7% | $5.55 | -23% | |
| 2006 | $6.25 | $6.70 | 7% | $5.38 | -14% | X |
| 2009 | $10.77 | $10.66 | -1% | $8.79 | -18% | X |
| 2010 | $9.16 | $13.38 | 46% | $8.94 | -2% | |
| 2013 | $13.01 | $14.10 | 8% | $11.63 | -11% | X |
| 2014 | $12.21 | $12.46 | 2% | $9.04 | -26% | X |
| 2015 | $9.04 | $10.45 | 16% | $8.53 | -6% | |
| 2016 | $11.59 | $11.61 | 0% | $9.34 | -19% | X |
| 2017 | $9.39 | $10.47 | 12% | $9.07 | -3% | |
| 2018 | $9.59 | $9.22 | -4% | $8.12 | -15% | X |
| 2021 | $14.39 | $14.23 | -1% | $11.85 | -18% | X |
| *Years in which USDA forecast an increase in the new crop US Soybean Carryout -Post Harvest. | ||||||