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Soybean Prices Go Down, Down, Down

November 17, 2012
By: Sara Schafer, Farm Journal Media Business and Crops Editor
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It’s going to take a major market jolt to turn the downward spiral of soybean prices around, says market expert Jerry Gulke.
 

Soybean prices continued their dramatic drop this week. January 2013 soybeans closed the week $0.68 lower, and November 2013 beans dropped $0.57.


See the January 2013 chart:

Jan soybean prices

Read more about this week’s commodity market movement.

Why are soybeans prices headed south? Partially, it’s because the crop has gotten larger. USDA has yo-yoed soybean yields this season. See how yield expectations started high, dropped, then rebounded.

USDA Soybean Yield Estimates:

  • June: 43.9 bu. per acre
  • July: 40.5 bu. per acre
  • August: 36.1 bu. per acre
  • September: 35.3 bu. per acre
  • October: 37.8 bu. per acre
  • November: 39.3 bu. per acre

 

"All this summer we heard about the drought," says Jerry Gulke, president of the Gulke Group. So, in September, USDA lowered yield expectations. But, that didn’t make the price go higher.

Then in October, USDA increased it by 2.3 bushels. Gulke says instead of that extra production going into carryover, it went right into usage. 

"What if $17 beans curbed demand?" Gulke asks. "Now, we may have to buy our demand back."

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