The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Soybeans, in my opinion, remain a two-headed monster! The USDA just released planted acreage at 81.5 million, obviously a NEW record. the data essentially shows every single production state was either increasing or leaving soybean acres unchanged except for MO and OK where there was slight decline. I hate to sound pessimistic, but simple math shows you this type of planted acreage should equate to about 80.6 to 80.7 million harvested acres. If you use a national yield average of between 44 and 45 bushels per acre, we could quickly see ending stocks push north of 300 million bushels. Meaning current price levels for new-crop soybeans would be too high and a drastic reduction of price could certainly be in the cards. I might be the odd man out on this, but I actually believe one saving grace might be the fact US soybean acres move lower NOT higher. I just think with the rally in corn prices, many of the guys that were going to make the switch to more beans are going to go ahead and roll the corn again. I also believe the delay in the wheat crop might make it tougher to get as many second-crop soybean acres in the ground. We continue to sit at 50% sold/hedged and are waiting for new-crop prices to rally back up above $12.00 before making any additional sales. Producers have to recognizing the potential for the bullish troops to quickly retreat to there rears. On the flip side, the old-crop remains impressive with the MAY14 contract posting new highs, and our most recent projection of $15.00 plus old-crop soybeans more of a reality. Keep in mind, US soybean stockpiles were reported at 992 million bushels, which was 1% below last year's level at this juncture. There might be some debate or questions raised against the fact "disappearance" for the quarter totaled 1.16 billion bushels, up 20% from a year earlier. CLICK HERE for my daily report.....
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