$10 Soybeans Still Possible

October 16, 2018 03:01 PM

Despite all of the challenges facing harvest, front-month soybean futures prices at the CME Group remain stuck below $9. Add in low basis and trade tensions with China, the outlook for strength seems soft.

Brian Basting with Advance Trading says for those people still harvesting good yields, $10 soybeans aren't an illusion. 

"This applies specifically to those who are looking at exceptional bean yields and we know there are some out there," Basting told AgDay TV host Clinton Griffiths. 

"Remember, it's about gross revenue, not the price," says Basting. "For example, if you have eight dollar soybean prices and a 75-bushel yield, that's $600 dollar gross." 

Basting says if your normal APH or average yield is closer to 60 bushels per acre, with a gross revenue to $600, that is the equivalent of selling all of your crop for $10 per bushel. 

"What's important to keep in mind is the flat price today is low because we have such exceptional yields," says Basting. 

Soybean prices this Fall will also include a tariff aid payment from the government.

"Sure a $1.62 on 50% will be $0.825 spread across those bushels," says Basting. "In my example, you could actually tack on another $0.825 to the $10 for those bushels."

Basting says that puts the prices just South of $11 and it all counts. If an operation can utilize storage there's also the chance to add to the price by utilizing carry in the market. 

"Just remember, that's the revenue you've put all your blood, sweat and tears into for 2018," says Basting. "That's the revenue that you've got and you have to know how to protect it."

Basting says nothing is guaranteed until you take action. 

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Spell Check

Eastern, NE
10/17/2018 11:19 AM

  75 bushel beans @ $8.00 is exactly that- $8.00. Gross revenue is two factors- Price x Yield. They are independent and accepting a higher yield at a lower price as a excuse for poor marketing is bad advice and not worthy of a pat on the back. Run your farm like a business to mitigate price risk. Also, don't use APH as a yield goal unless it your goal to beat.

Charles Larsen
Denmark, WI
10/17/2018 09:40 AM

  Voodoo economics at work here. Plus, Perdue as already stated because of NAFTA version 2, payments for beans and corn probably won't happen regardless if price comes up or not.

Lecompton, KS
10/17/2018 04:11 PM

  The people chattering about 60-70 bushel fussing about prices should think about some Kansas farmers faced with a probable of maybe 12-14 bushel at this price. Eastern Kansas is really taking it on the chin this year, and the quality is very very poor.