Soybeans in the Teens

In the November WAOB report USDA forecast the 2021 US soybean carryout at 190 million bushels or about 4% of crop year usage. The accompanying scatter studies display the October/May high and low for central Illinois soybeans as a function of the US soybean carryout as a % of crop year usage since 1993. Note that a 4% carryout to usage ratio is associated with past years in which Central Illinois soybeans traded in the mid teens.

Of course soybean price discovery this winter will be impacted by South American soybean crop developments. So far the Argentine and Brazilian crops appear to be developing normally but December – February are the critical months. Buyers may be content to slow purchases of US soybeans if South American crop prospects remain favorable. But the market could turn explosive if dry weather should threaten alternative soybean supplies in the Southern Hemisphere.