Soybean prices have had “quite a nice rally” to levels matching last summer’s highs, opening opportunities for farmers who want to lock in a profitable price for their crop, said crop economist Frayne Olson.
This week marked the third week of price increases for soybeans, nearing one-year highs on Friday, as dry weather wreaks havoc on Argentina’s crop.
As of midday Friday, futures prices for soybeans traded for $10.39 per bushel.
Argentina and Brazil are big competitors to U.S. soybeans, said Olson, who works for North Dakota State University Extension.
Brazil is well into its harvest and seems on track to get near the record production levels it had last year, but things continue to get worse for Argentinian farmers, possibly sending global buyers to the U.S. to ensure they can lock in the supply they need.
Olson said traders will be watching closely for the next several weeks to make buying decisions. U.S. export numbers over the next few weeks, reported by the U.S. Department of Agriculture, will show how nervous buyers are about the weather.
“So far, they’ve been good but not nearly as aggressive as in the past,” Olson said of exports.
On Friday, USDA predicted soybean exports for the 2018 crop year could climb to 2.3 billion bushels with the issues in Argentina. With that increase, USDA estimates soybean stocks after harvest will drop by 70 million bushels compared to what was left in stock this year after last year's harvest.
As of Dec. 1, the U.S. had 3.16 billion bushels of soybeans stored. In North Dakota, storage of last year’s harvest totaled 125 million bushels.
When it comes to spring planting, USDA doesn’t expect a large growth in the number of acres seeded to soybeans like the record crops planted in the U.S. the past two years.
In North Dakota, Olson said he’s hearing farmers leaning toward more soybeans again.
“Even with an average yield, they can pencil out a bottom line that seems to work,” said Olson, pointing at the prices of other crops which are not showing profit potential at current prices.
USDA will release planting survey numbers at the end of March, giving a better idea of what farmers are planning for acreage.