By: Todd Hubbs, Department of Agricultural and Consumer Economics University of Illinois .December 9, 2019. farmdoc daily (9):230
The two major drivers of uncertainty impacting soybean prices in 2019 appear set to carry over into 2020. The status of trade negotiations with China continues to move soybean markets despite numerous fits and starts in the process. Another USDA estimate of the 2019 soybean crop comes out in January. Without supportive information on either issue, the sustainability of the recent price rally into 2020 seems remote.
Nearby soybean futures prices since the middle of September ranged between $8.70 and $9.40. The highest prices came in mid-October in association with a reduced soybean production level in the October WASDE report and thawing relations on the trade front. The lowest prices occurred in early December after another round of trade frictions. Soybean basis during the recent rally in central Illinois sits in a stronger position than during the October price jump. Soybean basis strengthened almost twenty cents in the region from October levels with cash prices at soybean processors showing particularly strong bids. Continue reading