Fundamentally Speaking

Dwindling Supply of Farmer Soybean Stocks

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst
Chart by Joel Karlin, DTN Contributing Analyst

Similar to what we did with corn, this graphic shows the average percent of U.S. soybeans marketed by month on the left-hand axis along with the smallest and largest percents for each month over the past 20 years.

This data is plotted vs. the seasonality of cash soybean prices received by U.S. farmers on the right-hand axis using data from the 2000/01 to 2019/20 seasons.

The chart shows on average farmers sell about 23% of their crop in October when prices are about 6.4% below the seasonal average and on average sell another 11% in November when prices are about 4.7% below the seasonal average market.

In fact, over the past 20 seasons, by the end of April famers have usually sold about 85% of the prior year's crop leaving only 15% to be marketed the last four months of the year, but this year it is estimated that producers have maybe 5% left of their 2020 soybean bushels.

This shoud not be too surprising for in a post earlier this month we noted the on-farm stocks as of March 1 was the lowest percent of total March 1 on and off-farm soybean stocks since at least 1990.

The point is producers have already moved a lot of their 2020 corn and soybean harvests and even though they sold at some of the highest values in years, farmers still think they left a lot of money on the table.

Coaxing the last of their 2020 supplies out of their hands is going to be incredibly difficult keeping spreads, basis and cash markets firm until they have greater confidence about good output prospects this season.

This may also result in producers moving away from their typical marketing patterns where a large bulk of their crops are sold early in the year, right after harvest when prices are usually the lowest.

For the 2021/22 year, remembering how they sold too much too soon, the fact that they have plenty of bin space and cash to hold off from early season sales and ideas that the current lofty prices may be with us for a while could make them relatively tight fisted for a while.


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