“Big Rally” In Soybean Prices Draws Increased Planting Interest

For months readers may recall our agriculture notes (read: here & here) on exploding soybean prices. Just last week, soybean futures hit levels not seen since 2014. Explosive demand from China and tight supplies resulted in elevated prices, which could unleash a wave of American farmers to plant more of the bean. 

The latest U.S. Department of Agriculture (USDA) report showed 2020/2021 soybean ending stocks at 120 million bushels, unchanged from last month’s estimate, indicating continued tightness in the global soybean market. With bean prices around $14 per bushel, interest has been building among farmers to plant more on average this growing season. 

David Iverson, the national secretary of the United Soybean Board, told Agweek that surging soybean prices have boosted interest in the bean to its highest levels in recent memory. 

“We’ve had down prices for a number of years and all of a sudden we get a big rally. So there’s more interest in soybeans now,” said Iverson said. 

By late March, the USDA will publish its widely followed annual Prospective Plantings report that could show farmers planted additional bean acres primarily due to elevated prices and prospects of increased demand from China. 

Last week, Soybean futures trading on the Chicago Board of Trade hit their highest price since late 2014.

Chad Hart, a crop markets specialist and Extension economist at Iowa State University, said, “when you look at the demand side (for soybeans), you’re looking at record demand. We’ve never seen the likes of the export sales we see right now.” 

The U.S. typically exports half of U.S. soybean each year, with China the top consumer, primarily feeding its hog population. But in recent years, as the African swine fever decimated the Asian country’s hog population – there’s been a rebuilding period that requires additional soybeans. 

Not too long ago, the USDA estimated 2021 soybean acreage at 90 million acres (6.9 million acres more than a year ago) – come to the end of March, the figure will be more accurate.

The question now remains will China hold up to its end of the phase one trade deal by satisfying purchase commitments?