How Good is this Soybean Crop So Far?
Jun 24, 2014
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According to the USDA soybean crop conditions are very good with 72% of the crop in good to excellent condition. With the USDA looking for a record yield soybean conditions will need to stay good throughout the growing season. It's still early in the growing season but how does this soybean crop stack up so far?
With 72% of the soybean crop in good to excellent condition we are certainly off to a great start. In fact, this is the best conditions rating for soybeans at this time of year since the NASS started publishing crop conditions in 1986. The only other years that were 70% G-E or better at this time were 1994 and 2003. In 1994 we ended up setting a record national average yield of 41.4. At the time this was a record by a huge margin (the previous record set in 1992 was 37.6). This was almost a 4 bushel per acre improvement on the previous national average yield. Currently the USDA is looking for a record yield for their balance sheet. They are expecting a 45.2 which would be 1.2 bushels and acre above the previous record of 44 bushels an acre set in 2009.
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The other year soybeans conditions were 70% G-E or better was 2003. The national average yield in 2003 ended up at 33.9 bushels per acre. This was 7.5 bushels below the previous record national average yield (again 1994)! If that were to happen this year the USDA's balance sheet would be dramatically tighter even with the record planted acreage.
So, the soybean crop so far looks great. Soybeans are 72% good to excellent compared to a 5-year average of 63% and an all time average of 61% for this time of year. This is the best rated crop for this time of year that we have seen. However, as we saw in 2003 a lot can change between now and harvest. This may help explain why November soybeans have held their range so well despite the fantastic crop conditions.
The bottom line is that soybeans are on a good track to set record yields this year and maybe by a long shot. However at this point in the growing season we can not take anything for granted. Soybeans will need good rains in August to produce huge yields. So, while soybeans might not need to rally with good conditions it may take at least a few more weeks like this before the trade believes the crop will be a record breaker.
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July Corn Daily chart:
July Soybeans Daily chart:
July Wheat Daily chart:
All this means that speculators should be looking for opportunities and producers need to look to lock up some prices. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.
In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!
Ted Seifried (312) 277-0113 or firstname.lastname@example.org
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