Soybean prices have been on a continual downward slide for several months. Ben Kasch, account executive for Bower Trading, says the lower trend began in 2023.
“Ever since the end of October, first of November, right there before Thanksgiving, we’ve seen our highs, and we’ve been eroding ever since with a pretty favorable weather forecast. We had some issues, you know, early on in Mato Grosso, but southern parts of Brazil were catching rains, in Argentina, we were catching rains, and that just kind of continued. Then, export sales weren’t matching up with the USDA’s ideas, So we continue to ratchet the export ideas lower on monthly crop reports, and that’s kind of expanding the carryout.”
He says energy markets also play a factor in the price decline.
“Energy markets are finally rebounding a little bit this past week. We’re seeing a price of almost 80 on crude, but from a fuel standpoint, biodiesel, and ethanol, those energy markets staying relatively low from the past three to four years is what’s creating some weakness as well in the soybean, so there are numerous factors. Bonds are also going short. Technicals turned negative as well. Trying to spur some demand is what these markets are trying to do and get to a low enough level to put a bottom in here.”
There is one factor that could turn this around, at least in the short term.
“I think the weather. Weather issues, if we have some issues going into our growing season when getting the planters moving, I think that could be something that would spark some short covering from the funds and help kind of reverse things. I guess it wouldn’t be just us. Maybe if China has some issues getting in the field during their growing season too or adverse weather there, that could also kind of turn things around.”
South American weather may be a big factor around U.S. planting time.
“A large crop coming from South America, Argentina, and Brazil combined, will keep the market supplied here in the near term. The global markets are also more dependent on that second crop in Brazil. The safrinha corn crop is being planted at this time. If they have adverse weather when they start to harvest at the end of June, some of the earliest stuff, mostly July. So, their weather during when our planter is rolling in the heart of the Midwest end of March to say the end of May timeframe, that’s a very critical time for yield determination down there on that second crop corn. If they have issues while we’re planting, that’s another thing that could get this market going.”
Ben Kasch of Bower Trading. For more information, go to bowertranding.com.