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Soybean Market Scenario Similar to Corn
Minnesota Ag Connection - 05/30/2023

In some regard, the soybean market has seen a similar scenario that is playing out in the corn market between old and new crop.

“We’ve seen a pretty good retreat in the soybean market. Old crop is still holding a pretty good sized premium over … just like we’re seeing in corn, where July is holding a big premium over the August contract. Right now, we’ve got about a 65-cent spread between the two inverted markets,” said Randy Martinson, president of Martinson Ag Risk Management, Fargo, N.D.

“We’re still a little worried about old crop supplies, and stocks are still fairly tight. What surprised us is that USDA did increase imports in the last report, so that kind of increased our stocks and made it a little less concerning on the old crop soybeans,” he added.

Martinson said there continues to be enough demand where the U.S. is going to make USDA’s projections and pace.

“But we’re also seeing a record planting pace for soybeans and that’s kind of taken some of the premium out of the soybean market,” he said.

With conditions being kind of cold, that led to a tough start to the planting season for corn, and a lot of producers have switched over and planted soybeans first. With improved weather conditions in mid-May, producers were making pretty rapid planting progress on the soybean side. Normally, that relates to a little bit higher yields, and USDA is projecting record yields for soybeans this year. If it’s not a record estimate, it’s one of the top production estimates, according to Martinson.

“That’s kind of a little daunting when you look at an ending stocks estimate that’s coming in at over 300 million bushels,” he said. “Demand still looks like it's going to be fairly robust, but not as robust as what we saw this year because we’re looking at China pulling back on a little bit of their import needs, so we’ll see if that falls through.

“But right now, with the rapid planting progress and the expectation of a big crop and the idea that the Northern Plains are having some planting problems with getting the wheat and the corn in the ground, and that we might be switching over and putting in more soybeans, that’s kind of kept that market a little bit on the defense,” he said.

Source: agupdate.com

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