“We’ve already added a good $1/bu. compared to where futures prices were in mid-October,” he points out. “Right now, we are seeing the possibility of returning to an inverted market, where the price today is higher than what it will is a couple months from now. Usually, that is a pretty bullish signal. It means that the market is trying to find more beans to buy, and the price is heading up. However, we’ll also have higher drying and handling costs than normal, which will cut into producer profits.”
Futures markets have now settled in the $10/bu. range, adds Hart. “Now it’s a waiting game for the next market signal to determine where prices will move,” he says. “Potential market movers include USDA’s Nov. 10 crop estimates and any more bad weather that might keep farmers out of their fields.”
Both corn and soybean harvests will probably continue to lag, however, says Drew Lerner, owner, World Weather. “I fully expect harvest to be going on into December as pockets of the Midwest continue to deal with excessive moisture,” he predicts. “What we might eventually see – or at least what we can hope for – is that the ground freezes without any snow present, so that harvest can get wrapped up for areas where too much soil moisture is preventing harvest now.”
Neither November nor December will likely bring the ideal harvest conditions farmers are hoping for, however, says Lerner. “We may see three or four days in a row with sunshine and warm weather coming up here and there in some areas, but I don’t see an extended period of warm, dry weather ahead for the region,” he says. “With as much moisture as we currently have in the ground now and cooler temperatures coming on, I can’t really see the top corn and soybean states drying out in a very big hurry.”
The threat from harvest losses is currently looming large for soybean producers, emphasizes Hart. “The big thing right now is to bring in as much of the crop as soon as we can,” he says. “A lot of farmers see where the prices are going and want to catch them, but they’ve got to get their crop harvested first.
“The longer soybeans sit in the field, the less production we’ll be able to bring in,” adds Hart. “Pods are splitting open and dropping beans on the ground as we speak.”
Prior to mid-October, USDA was projecting the possibility of a record soybean crop, says Hart. Those projections may change the longer soybeans sit in the fields, he adds.
“This is already the latest soybean harvest on record, at least from what I could find from USDA data,” he says, “and soybeans continue to get rained upon.”
Meanwhile soybean export demand remains robust, with China the star player, says Hart. “China has roughly doubled the amount of soybeans they’ve bought this marketing year compared to last year,” he says. “In fact, China has now bought the equivalent of nearly all the soybean production from the state of Iowa this year – and they continue to buy. USDA estimates that we will see record soybean export demand this 2009-2010 marketing year, which will easily surpass last year’s record sales.”
As a result, the market will likely reward farmers who can harvest soybeans before weather conditions deteriorate their crop and who can store soybeans in good condition for a few months after harvest, notes Hart.