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Soybeans headed to ‘sweet sixteen’?

May 14, 2008 10:40 AM, By Elton Robinson
Farm Press Editorial Staff

Soybean prices might head toward $16 per bushel this summer and could pull other grain prices to higher ground as well, according to Jon Marcus, Lakefront Futures and Options, Chicago, Ill.

Marcus, speaking at a Minneapolis Grain Exchange press briefing on USDA’s May 9 World Agricultural Supply and Demand Estimates, said the impetus for a potential run-up was the report’s surprising assessment of soybean ending stocks of 145 million bushels for the 2007-08 crop and 185 million bushels for 2008-09.

The report “is very bullish for soybeans,” Marcus said. “With (wet) weather as a dominant influence, it could keep corn and wheat prices firm as well, even with the bearish numbers for those crops.”

When asked if beans could test previous record highs, Marcus said, “This is a good start. To test the highs over the summer would not surprise me. This (ending stock figure) is one number, and we still have a long way to go. With 70-cent limits, I would not be surprised if we test $16 in July and August, especially if we get some bad weather over the summer.”

Wheat ending stocks for 2007-08 of 239 million bushels were not far off average trade expectations of 242 million bushels, according to Marcus. USDA projected wheat ending stocks for 2008-09 at 483 million bushels, compared to trade expectations of 428 million bushels.

USDA pegged U.S. corn ending stocks at 763 million bushels, up from the average trade estimate of 685 million bushels, but still the lowest in over 10 years.

Marcus says weather worries in the Midwest over the next week or two “could also keep corn supported. But soybeans could start leading the way to the upside.”

Marcus said he expected a larger reduction of 3 to 5 bushels in estimated average corn yield instead of USDA’s 1-bushel reduction, “which was on the bearish side for corn.”

With the bullishness in soybeans and delays in corn planting in some regions, it’s possible that some growers may shift to soybeans this planting season, Marcus said.

Marcus believes the effect of weather on planting progress is a bit overstated, but with good reason. “Everybody is looking to the sky now. There’s a mad dash to get crops in. We’ve gone through this before, but this year, we are under such a microscope because every kernel is important. But I believe when all is said and one, the plantings will get done.”

e-mail: erobinson@farmpress.com