Soybean traders are watching this week’s meeting between President Trump and Chinese President Xi, while grain markets continue to weigh tighter supplies and strong demand. Terrain Ag market analyst Marc Rosenbohm tells us what is influencing prices in the weeks ahead.
“If we look back to the last meeting, I think one of the big takeaways for me at least was market participants want information soon after that meeting. I think we could see a fair amount of volatility around that meeting on the soybean side in particular. Depending on how quickly we get information out of that meeting and also what the results are there. Whether we end up with more ag products or generally friendly trade environment. We’ve seen leading up to that meeting anywhere from say 38 to 64% of their 25 million metric ton commitment for soybean purchases for this crop year. Depending on how you count what’s announced to unknown destinations. It looks like we’re probably on track.”
Beyond the potential trade implications, Rosenbohm says soybean demand remains a bright spot for the market.
“Overall, I take a step back and look at soybean export sales, not just to China or unknown, but to all destinations. We’re running the highest in about four years. At the same time, we’re needing more for crush for biofuels. I think we have a pretty good story in the soybean market at the moment.”
Elsewhere in the grain complex, Rosenbohm says a combination of domestic and global factors has helped support prices.
“On the corn side, we saw USDA reduce yields even further in their September WASDE report. I think that was largely expected by the market. There was not much significant market reaction there. At the same time, across the grains complex, with a combination of lower yields on the corn side and then a tighter wheat situation, given what’s going on in Russia and Ukraine, I think have all worked collectively to hold up and support grain prices.”
As harvest continues, he encourages producers to focus on profitability and marketing opportunities.
“When we look at December contract here in the $5.35 range here today, and looking in the mid-fives out for the rest of the marketing year, and soybeans in the low to mid-13s, I would encourage farmers to take a look at what they can get locally and run their margin calculations. See what they can make at current prices. I would encourage folks, even though they might be sitting in the combine at the moment, to run some of those numbers and consider whether where we’re at now makes sense to price at least a bit of grain, given that we’ve seen the run-up from a chart perspective, seen a short-term top. Maybe it’s not the high of the year, but over $5.00 board corn and over $13.00 board beans historically has been reasonable to a pretty good price.”