It seems really unusual that soybean processors or crushers in Mankato and Fairmont have a basis bid in the fall of 35 to 40 cents under futures? Normally the bean basis would be a dollar a bushel or more under futures prices. The USDA said we had a very large carryover going into harvest. Plus the USDA said we harvested a very good soybean crop. So, where are all the beans and why are the crushers trying to bid up to get farmers to sell beans?

I also checked the bean basis at the river port in Savage. I believe the beans delivered in Savage make their way down to the Gulf of Mexico for export. Their bean basis was the same as the crushers, 31cents under futures. They need beans too! I read a spokesperson for Bunge said farmers were "hording" their beans and not selling them. Maybe farmers think that we do not have all the beans the USDA says we have and prices will move higher?

Farmers have a fixed amount of bin space for beans when they harvest in the fall. If you have a really good crop your bin space gets full and you haul the extra beans to the elevator. Many farmers may have forward priced or sold some of the beans that they anticipated they would not have room to store them on the farm. Those beans would be available to "fill the pipeline" so crushers would not have to bid up to get the beans.

The USDA may say we have plenty of surplus beans in Minnesota and the Midwest. However, the cash market seems to indicate we are not "swimming in beans!