A $1/bu. Range for Soybeans into August

By Linda H. Smith

Between now and the next USDA supply–demand report on Aug. 12, November 2010 soybean futures could trade in about a $1/bu. range, possibly in the $9.75 to the $8.75 area, says Bill Fordham of C&S Grain Market Consulting. “However, the increasing importance of outside market factors such as the strength of the U.S. dollar and crude oil prices, along with non-ag money flows are making price projections that are based on history extremely difficult,” he cautions.

Last month’s high November futures price was 109% of USDA’s projected average price, he reports. “I expect the high to be a slightly higher percentage of USDA’s average price, possibly in
the 110% area, or around $9.75.”

Last month’s low was 102% of USDA’s average price, he says. Given expected volatility, Fordham expects the low little lower relative to the USDA average price in the next month, possibly in the 99% area, or around the $8.75.

“Since 1997, the ranges for November beans during the month following the June supply–demand report have ranged from between $4.43 in 2008 to 26¢ in 2003, and have averaged about 113.00 cents,” says Fordham.