Nice Soybean Rally!

It has been a very nice post-harvest rally in beans. On November 8, January beans traded at $9.82. Monday's high was $10.65. That an increase of 83 cents a bushel. When you look at cash bean prices, they are about $1.75 a bushel higher than they were one year ago. Brazil had a good bean crop last year but Argentina lost some of their bean crop when flooding rains occurred right when their beans were ready to harvest. In addition, Malaysia's palm oil production has not recovered from bad weather like traders expected.

Even though we had a record bean crop in the United States this year, we are the only country in the world with beans available for export. That explains the huge export demand from China and other countries that need beans or the products like bean oil and meal. The United States will be the only country with beans available until late February or March when Brazil will be harvesting the crop they are planting now.

The question all farmers are asking is how much farther can beans rally? The answer depends on the weather in South America, and the weather here in the United States for our next growing season. Good weather in South America and in the United States, there is little doubt bean prices move much lower. One the other side, any hint of adverse weather and we will likely move much higher. Making marketing decisions would be easy if we know what the weather was going to be months in advance, wouldn't it!