Soybean contracts moved lower the last week of September, along with many ag commodities, energy and metals markets. On Sept. 30, the CME Group markets closed with silver, crude oil, soybeans, corn and wheat commodities all lower due to a stronger U.S. dollar and economic uncertainty. Factors like the Greece debt situation, or fears of a U.S. or global recession, affected the commodities more than macroeconomic factors such as supply and demand. Even the value of gold dropped in September, pointed out Betsy Jensen, Northland Community & Technical College grain marketing instructor. Jensen is also editor of “Prairie Grains.” While soybean prices and futures contracts have been high for a long time, external factors – like economics –have brought the market lower. Back in 2008, soybean prices plunged as a result of the housing crisis and the last recession. The last major commodity rally died due to external factors, and the same thing could happen again, she pointed out. That’s why it’s so important to have marketing plans in place. On Sept. 30, November closed at $11.79, while January 2012 closed at $11.895, March at $11.98, May at $12.03 and July at $12.11 per bushel. Compared with prices on Sept. 16, November was down $1.795, January was down $1.75, March was down $1.735, May was down $1.70, and July was down $1.69 per bushel. The lower tone to soybeans was unusual given the USDA Grain Stocks report issued on Sept. 30. The report indicated Sept. 1, 2010 soybean stocks were 214.7 million bushels – about 10 million bushels lower than pre-report estimates. From a fundamental standpoint, soybeans could have been quite bullish. In addition, the USDA reported, on Sept. 29, weekly export soybean sales were an exceptional 1.03 million metric tons (37.8 million bushels). Instead of looking at supply and demand, the market was busy looking at higher-than-expected 2011 U.S. soybean yields, plus better weather for South America planting. Jensen also pointed out that the Sept. 1, 2011 number was about 60 million bushels more than the U.S. had one year ago. “Traders now expect the soybean crop to get a little bit bigger – that remains to be seen if we will have more bushels out there,” Jensen said. “Plus we’re also looking at the high prices encouraging South America to plant even more soybeans.” Analysts suspect the USDA could make revisions to the September Grain Stocks report, as well as to the Oct. 12 Crop Production report. “There’s probably going to be significant changes even after the October crop report is published,” she said. “Please don’t think that in October you’re going to know where the corn or soybean market is headed – because it will still be so up in the air.” There was plenty of production variability in soybeans in 2011. Early harvest reports indicated good yields in Minnesota and North Dakota. In some cases, later planted soybeans were not yielding as well – perhaps nipped by the Sept. 15 frost or the summer’s dryness. At one elevator in western Minnesota followed in this column, cash soybeans on Sept. 30 were $10.81 per bushel with a basis of minus $1.05. Compared with a bid of $12.46 on Sept. 16, the price was $1.65 lower, and the basis had narrowed by 5 cents. Iowa’s state average basis on Sept. 29 was minus 79 cents. “Traders are thinking that South America can make up for the lack of the U.S. soybean production,” Jensen suggested.

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