The November 2024/September 2024 Soybean Spread – 11/27/2023

Historically,  the November/September soybean spread has been closely correlated with the expected US soybean carryout (September 1 stocks). In the November WASDE report USDA forecast the 2024 US soybean carryout at 245 million bushels or just short of 6% of crop year usage. In recent years a carryout of less than 6% of crop year usage is considered tight or favoring old crop (September) versus new crop (November) soybeans.   

The accompanying scatter studies express the November/September soybean spread as a function of USDA’s spring carryout to usage ratio forecast. The spread is calculated as the maximum carry (most November)  and maximum inversion (most September premium to November) during the winter spring months. On 11/24/2023 the spread closed at 19 cents premium to the September over November contract or -19 cents. 

Note that the scatter studies would suggest room for September to gain on November soybeans this winter assuming USDA’s current US soybean carryout forecast. 

An additional variable to consider is the prospect of a large South American soybean crop which will be heavily marketed in the Northern Hemisphere summer and weigh on nearby soybean (old crop)  futures prices over new crop futures. Crop problems in Argentina or Brazil would favor the long side (long September vs short November) spread, but we consider this as a long shot in the 2023/2024  Southern Hemisphere crop cycle due to the current phase of the El Nino/La Nina weather cycle.