Nogger's Blog

04/09/13 -- It's "Turnaround Tuesday" on a Wednesday following the Labor Day holiday on Monday. If you get my drift. At least it's a turnaround for soybeans, which actually began an hour of so into yesterday's daytime open outcry session.

The USDA cut soybean good/excellent ratings by 4 points to 54% last night, versus the 4-6 point cut that most were expecting. Is the glass half full or half empty with that one?

Well, good/excellent ratings in beans were only 30% this time a year ago, and US farmers still ended up with a final yield of 39.6 bu/acre. If we go back a further 12 months, at this time in 2011 56% of the soybean crop was rated good/excellent, 2 points better than currently. Final yields then finished up at 41.5 bu/acre.

So it seems fair to me to assume that, as things stand, US soybean yields should end up significantly better than 39.6 bu/acre, although maybe a tad lower than 41.5 bu/acre.

The question now then is what does the trade think? How much of a decline in yields has been factored in since the USDA report came out with their 42.6 bu/acre estimate on Aug 12th? Nov 13 beans closed at USD12.25 1/4 that night, they've risen USD1.61 1/2 since then, as of last night's close.

That's a 13% increase, which looks way too much from where I am standing. You will recall last week's soybean seasonal chart here which showed a frequent pre-harvest weather scare peak in the mid-Aug/early-Sep period before prices fall back again to set an early Oct low.

Seeing as the current 54% good/excellent rating is very close to the 56% of 2011 it may interest you to hear that at the end of Aug 2011 front month beans were USD14.49, by early October they were USD11.78, a 18.7% fall.

They've done studies, you know, 60% of the time it works every time.