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May 12, 2021, 3:06 p.m. EDT

Soybean prices post highest finish in over 8 years

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Myra P. Saefong

Soybean futures rose sharply on Wednesday to register their highest settlement since September 2012, buoyed by expectations that supplies of the commodity will remain tight next year.

The U.S. Department of Agriculture forecast U.S. soybean ending stocks for the 2021/2022 marketing year at 140 million bushels, up 20 million from the 2020/2021 forecast, according to the monthly World Agricultural Supply and Demand Estimates report released Wednesday.

Despite the expected increase, “the report confirms the very tight ending inventories for soybeans through next year,” said Sal Gilbertie, president and chief investment officer at Teucrium Trading.  “Soybean ending inventories are too small for comfort,” and the USDA confirmed that the situation “will not change even with this season’s new crop.”

On Wednesday, July soybeans /zigman2/quotes/210327428/delayed SN21 +5.04% /zigman2/quotes/210304009/delayed S00 +4.97% rose 27 ¾ cents, or 1.7%, to settle at $16.42 ½ a bushel in Chicago, with prices based on the most-active contract ending at their highest since Sept. 19, 2012, according to Dow Jones Market Data.

In terms of “carry-out days” of excess supplies, U.S. soybean ending stocks, which is the amount left over at the end of a marketing year, was at 48.5 days for the 2019/2020 marketing year, said Gilbertie. The forecast for 2020/2021 is just 9.6 days worth of excess supplies, and for 2021/2022 it’s now at 11.6 days – and “that’s assuming good weather,” he said.

Corn and wheat futures, meanwhile, finished lower Wednesday. July corn /zigman2/quotes/209727792/delayed CN21 +3.91% fell 7 ½ cents, or 1%, to $7.14 ¾ a bushel. July wheat /zigman2/quotes/210394601/delayed WN21 +3.60% ended at $7.29 ¾ a bushel, down 12 cents, or 1.6%.

The USDA said that with total U.S. corn supply rising and corn use declining, 2021/2022 ending stocks are expected to be up by 250 million bushels from last year to 1.51 billion bushels.

Ending stocks are about 150 million “more than what the trade was estimating,” said Craig Turner, senior commodities broker at Daniels Trading. “These are not bearish numbers, but they are not as bullish as traders wanted to see.” 

A 1.5 billion new crop carryout is “right on the line” of being tight or adequate, he said. “Any loss of yield or increased demand puts new crop into a tight stock situation and possible price rationing.”

The USDA also projects U.S. wheat ending stocks for the 2021/2022 marketing year at 774 million bushels, 11% lower than last year and the lowest in seven years.

/zigman2/quotes/210327428/delayed
US : U.S.: CBOT
1,396.75 ¢
+67.00 +5.04%
Volume: 88,319
June 18, 2021 1:19p
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/zigman2/quotes/210304009/delayed
US : U.S.: CBOT
1,315.00 ¢
+62.25 +4.97%
Volume: 132,232
June 18, 2021 1:19p
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/zigman2/quotes/209727792/delayed
US : U.S.: CBOT
657.75 ¢
+24.75 +3.91%
Volume: 164,283
June 18, 2021 1:19p
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/zigman2/quotes/210394601/delayed
US : U.S.: CBOT
662.00 ¢
+23.00 +3.60%
Volume: 50,758
June 18, 2021 1:19p
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Myra P. Saefong is on the markets team in San Francisco. She has covered the commodities sector for MarketWatch for more than 10 years. She has spent the...

Myra P. Saefong is on the markets team in San Francisco. She has covered the commodities sector for MarketWatch for more than 10 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005. Myra has been with MarketWatch since 1998 and holds a master’s degree in English literature.

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