Soybean Opportunities
The June World Agricultural Supply and Demand Estimates report from the USDA will be released tomorrow. Analysts are expecting minimal changes to soybean ending stocks on this report. The average estimate for old crop soybeans is 351 million bushels (mb), up from 350 mb from the USDA in May. The average estimate for new crop soybeans is 298 mb, up from 295 mb. New crop ending stocks were well below the trade expectation at 362 mb on May 12, old crop stocks also came in lower than the average estimate. If ending stocks are tightened more than expectations, again, that could trigger a rally in soybeans.
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At the end of the month, the Grain Stocks report and Prospective Plantings will be released. The Grain Stocks report can bring some volatility to the market. In the June 2022 report, soybean on-farm storage was up 51%, and stocks in all positions were up 26% from the year prior, causing a quick drop in prices from above $15.00 to $13.00.
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Warmer temperatures are needed going forward, as there has been a lack of growing degree days thus far and that’s what the forecast shows for the next 10 days. Soybean planting progress is 90% complete as of Monday, with crop ratings at 68% good/excellent.
The U.S. has agreed to a trade deal with China and progress towards a deal with Canada and India has been made. Soybeans closed lower today, despite the China news. If prices break out of their two-month sideways pattern, a move above $10.75 in November soybeans would be an opportunity to get hedged.
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