It finally rained in August. Too late for corn, but not so for soybeans. The most punishing heat came in June and July, just when the early-planted US corn crop was in pollination. Soybeans are planted much later, though, and were still in a position to benefit from the rain.
Soybean prices peaked in early September, even while most analysts were still forecasting a worst-case scenario for the crop. The September 12 USDA monthly crop report lowered the bushel-per-acre yield (bpa) to 35.3, down from the 36.1-bpa August estimate and not far off the average of analysts’ guesstimates of 35.8 bpa. Even the most recent weekly crop progress report put the good-to-excellent portion of the crop at 33%, only three percentage points above the worst readings that prevailed through most of the season and dramatically worse than last year’s reading of 53% at this juncture of the season.
Although soybeans that were planted early did not fare much better than did corn, late-planted crops, which include beans that are double planted, seem to have grown under fairly normal conditions. A survey of analysts taken in recent days, indicated that the average national yield would rise to 35.8 bpa. Traders, however – judging from the $1.50-per-bushel price slide – seem to believe that the improvement in yield was considerably larger.
The promise of massive South American crops to be harvested next spring is expected to provide relief, should the US “run out of beans.” As always, though, weather has made predicting South American crops impossible and we’re beginning to see shades of trouble. Argentina had an extremely wet August, which is a positive in terms of securing adequate subsoil moisture and inspired analysts to increase their crop estimates. The precipitation, however, was excessive to the point of flooding in key regions, affecting hundreds of thousands of acres which cannot be planted until the fields dry out. Late planting typically reduces yields.