Soybean harvest is underway in the Midwest. As combines roll, yields are surprising farmer and analyst expectations.
“We’ve seen preliminary bean yields, and they are really, really big,” Andy Shissler of S&W Trading told Clinton Griffiths this week on AgDay TV. “My gosh, we’ve seen central Illinois yields with some farms at 88 bushels [per acre].”
Shissler has seen a lot of 75 and 80 bu. yields being reported. That is casting doubt on current prices to hold up, he says.
“We were waiting to see if it was going to be that big, and the market in beans was pretty tight, so we were trading cash prices,” he says. “[We were] getting short on beans waiting for harvest.”
Shissler says record loadings need to go to China. Filling them was difficult because there weren’t many soybeans available – that’s what he credits the most recent price run up to. Unfortunately, a big yield might be the worst thing for price in these current market conditions.
“I think we’re going to do a ‘slow dissolve’ in price,” he says.
If prices erode in the coming months as harvest finishes, Shissler thinks beans will head back down to the $9 level.
“I think we’ll do that by the middle of next month,” he says.
For the first time in nearly a decade, there’s a chance supply could outpace demand. During that period of time, the market will be tough to navigate, according to Shissler.
“Demand will be good,” he says. “Things are going to get better, but they’re going to get worse first.”