Last week, USDA surprised farmers by predicting a record national soybean yield of 48.9 bu. per acre and strong demand for new and old crop soybeans. Could prices stay above $9 long term? Ted Seifried of Zaner Ag Hedge thinks so.
“That was the big surprise last Friday, the big increase we saw in demand for new crop and old crop beans and a record yield 48.9 [bu. per acre],” he recently told AgDay host Clinton Griffiths. “At the end of the day, you’re looking a 330 million bushel carryover for soybeans.”
That carryover could be tight, according to Seifried.
“From a stocks-to-usage percentage, that’s really tight,” he says.
Because of tight carryover and increasing demand, Seifried says prices could improve.
‘”The way we get there is the big increase in demand,” he says. “It’s been 11 days straight we’ve seen something on the global wire. Global end-users have stepped up in a big way in the last few weeks and wanted ownership.”
Moving forward, farmers should see the increased activity as an indicator that soybeans are currently at value prices, Seifried says.
“As long as that demand stays true and the number USDA is currently using on the balance sheet holds, it’s very difficult to make the argument for sub-$9 soybeans any time soon,” he says. “If we start talking something below a 300 million bushel carryover in soybeans, I think pretty quickly we have to start talking about $10, $11 beans.”