Beans in the teens? I never thought I would hear myself saying that phrase again — but it certainly is a reasonable possibility this year.

When the USDA reduced its estimate of this year's planted acreage to 64.1 million acres versus last year's 75.5 million acres, the door opened wide for the possibility of double-digit soybean prices.

Bullish/average/bearish explain three very possible scenarios. Acreage will not likely vary much from 64.1 million acres. If anything, it may be slightly higher rather than lower.

What is obviously most important, however, is yield. In the central Midwest, the critical growing weather for soybeans is the last half of July and the first half of August. With a trendline yield of 42 bushels per acre, the expected carryover this year would be a mere 308 million bushels, resulting in a stocks to usage ratio of 10.4 percent. That compares to the 2006-07 stocks-to-usage ratio of 20 percent.

Now, throw in some weather problems and drop the yield to only 39 bushels per acre. At that level, rationing would have to take place, which would cut into exports and domestic usage. Both would need to occur to maintain a carryover above 200 million bushels.

In an emotional market with weather problems obvious, this is the type of scenario that would be needed to push beans above the $10 mark.

Before everyone gets too bullish, let's not forget there are some bear arguments here. With good weather and a yield of 44 bushels per acre, soybeans will struggle to average above $7.50. With November futures over $9 as I write this article, that would mean beans are very overpriced.

Also, while a carryover at 308 million bushels is tight, in 2003-04 the carryover was a mere 112 million bushels and in 2004-05 it was 256 million bushels. In the first year the average price at the farm was $7.34 and in the second it was $5.74.

Weather concerns in the last half of July and the first half of August could well result in a blowoff top in this market. Where? It's too hard to say at this point. It's more important to look at a time perspective rather than a price perspective.

This type of a runaway bull market will almost always peak just before or during harvest. My guess — the top in this market will be before the end of August. If so, this offers not only a tremendous opportunity for locking in this year's soybean prices but also for selling some soybeans for 2008-09.

Hang on to your hat — this market is going to be extremely volatile and there will again be a “bidding” war for planted acreage in the spring of 2008.