Planting of the 2020 soybean crop has been “going great” and crop condition is looking very good, as well, which has producers optimistic about a very good soybean crop this year.
“The crop is over 70 percent good-to-excellent. The production side of soybeans looks very strong right now,” said Betsy Jensen, Northland Farm Business Management and a producer/marketer from Stephen, Minn.
“We were going to have a big increase in soybean acres from a year ago because we had such a huge drop last year, and the market will probably still have some extra soybean acres this year,” she said. “A lot of corn acres may have gotten switched to soybeans. I think overall the market will look for a bump in soybean acres and right now crop conditions look good, so from a supply standpoint, soybeans are doing just fine. There are no major concerns for soybean supplies.”
When it comes to demand, Jensen said it’s important to keep in mind the soybeans “that’s in your bins right now” as USDA made huge cuts to soybean export sales for the 2020 crop year.
“We are on track to meet those export sale goals but it really goes back and forth,” she said. “There are some weeks where we sell a ton and some weeks where we sell nothing. We still have a little ways to go for soybean export sales, but so far we are on track.”
In regards to the Phase One trade deal with China, Jensen noted that China has been making some purchases, but the numbers are not matching up in USDA’s report
“(USDA) will make an announcement of soybean sales, but then we struggle to find that in the weekly reports,” she said. “Trying to track soybean sales to China is not very easy right now.
We’re trying to figure out if we are selling this many soybeans, but the reports are saying different things.
“We are hoping that China will still come in to buy soybeans,” she continued. “You see the news reports, the tweets from the president every other day that say we’re best friends with China and then we’re back to enemies, so it’s been a tough one to track, that’s for sure. But right now it looks like we’re going to meet our soybean export demand (goal).”
Comparing the corn and soybean markets, Jensen said that corn is “as bearish as it comes, but soybeans actually look pretty respectable when it comes to the possibility of a rally.”
“We do not foresee burdensome supplies in soybeans, but that being said, we also have new crop beans over $8,” she continued. “You can sell your beans off the combine for over $8 here in the Northern Plains. That’s not great, but it might be a decent place to start making sales.
“When you look at your cash flow for this fall, with soybeans generating a little bit of cash off the combines, which is probably a good place to start. I think a lot of guys are taking advantage of this, not going overboard with sales, but definitely making a few sales.”
Soybeans, Jensen noted, are probably at this point the most dependent on the U.S. dollar in regards to export sales, and the dollar has really been having some fluctuations lately.
“A weak dollar is definitely optimistic for soybean prices. Producers should keep their eye on that U.S. dollar value, as well,” she said. “We still have to get rid of the soybean exports.
“Looking ahead to our 2020 crop, we’re expecting to sell a lot more soybeans in 2020 and a weak dollar will help us meet that goal,” she said.
At one local elevator in west central Minnesota regularly followed in this column, as of June 9 the cash price for soybeans was $8.06 and basis was -55 cents under. September 2020 future price was listed at $8.75 and basis was -3 cents under.