Winter rallies may be heartwarming for farmers, but it’s probably wise not to get too attached for the long haul. Price gains can disappear as quickly as April snow.
Much like the corn market, soybeans shook off bearish USDA numbers in January and rose sharply, with July futures near $12 per bushel in early March.
Was this just another tease? Farmers trying to figure out old-crop pricing strategies can find context from recent history. Over the past decade, the July soybean futures contract offered something for both bulls and bears. In 2017 and 2019, July futures posted calendar lows and then rallied within a few months of expiration.
The last two years might offer closer comps, with the average spring peak-to-expiry decline at $1.05, or 8.9%. Both years also followed relatively strong harvests above 4.1 billion bushels and comfortable supplies relative to demand, with stocks-to-use ratios at 7.4% to 8.3%.
A few caution flags for bulls: U.S. soybean stocks at the end of 2025-26 are seen expanding to 350 million bushels, a six-year high. Brazil’s harvest is expected to be record-large.
Bears should also beware: Expectations for increases in biofuels mandates could continue to underpin prices. Also, the president likes to post stuff on social media about China buying soybeans.
Of course, the biggest wild card of all, spring and summer weather, is anyone’s guess at this point. But the past two years suggest the best old-crop pricing opportunities may present themselves before school lets out.
