Soybeans finishing strong in the field and on the trading floor

In farming success is often measured in decades and generations, but sometimes it’s measured in weeks or even hours.

Even before the U.S. Department of Agriculture’s National Agricultural Statistics Service published its weekly Crop Progress and Condition report, Jeremy Ross, extension soybean agronomist for the University of Arkansas System Division of Agriculture was feeling positive about the turn the 2020 harvest had taken over the past two weeks.

“These have been about the best conditions for harvest that we’ve seen the last couple of years,” Ross said. “If this weather pattern keeps up, we should be done by the end of the month.”

When the NASS report was released last week, it showed harvested acres rising from 67 percent to 82 percent over seven days.

“That’s a 15 percent jump in one week,” he said. “Over 400,000 acres. Another two weeks and we’ll be close to finished.”

The 2020 harvest has been difficult for some Arkansas crops, most notably cotton. Soybeans, however, have emerged mostly unscathed, despite several damaging weather systems pushing heavy winds and rain into the Southern Plains during the spring and summer.

“Most everyone is pleased about how their beans turned out,” Ross said. “It seems like the difference between success and struggle hinged on the tropical depression from Hurricane Laura that came through. Statewide, it didn’t appear that we had a lot of damage, but there was lodging in some fields that I walked, and those farmers were disappointed in the yields.”

In addition to a generally successful harvest effort, recent reports on the soybean cash market have been upbeat. After years of depressed commodity prices, soybean bookings and cash market prices surged into the $11 bushel range during the first week of November.

“It’s a little unusual,” Ross said. “It’s during harvest that we typically see the lowest commodity prices in a year.”

Ross said that contributing factors to the price gain include an increase in purchases from China and reduced U.S. soybean supply, resulting from the powerful derecho event in August, in which straight-line winds caused more than $7.5 billion in damages from Iowa to Indiana, destroying millions of acres of corn and soybeans in the process.

Scott Stiles, agricultural economist for the Division of Agriculture, said the derecho storm profoundly impacted overall U.S. production.

“Prior to that event, USDA was projecting the United States would harvest its second largest soybean crop in history of 4.425 billion,” Stiles said. “The record was 4.428 in 2018.

“Since August, the U.S. average yield has slipped from 53.3 to 50.7 bushels per acre,” he said. “Yield reductions in the largest soybean producing states like Iowa and Illinois played a key role. Since August, USDA has lowered Illinois' yield by six bushels per acre and Iowa by four bushels. Yields in Indiana, Kansas and Missouri have all been lowered three to four bushels since August. The combination of all that has removed almost 255 million bushels.”

Stiles said that since August, the USDA’s projection of year-end soybean stocks has fallen from 610 million bushels to 190 million bushels, the lowest inventory since 2014.

Stiles added that while prices for soybeans and other commodities have improved dramatically in recent months, the best may be yet to come.

“The current pace of export sales could lead to further increases in USDA's already record export projection,” he said, noting that eastern Argentina and southern Brazil, two major soybean producing competitors, continue to suffer unusually dry conditions. On Tuesday, the USDA lowered its estimate of the Argentine soybean crop by 2.5 million metric tons.

“How the South American crop turns out will have a direct bearing on whether the United States will play a larger role in world soybean trade in 2021,” Stiles said.

Ross said his office was already fielding calls from growers and consultants regarding the availability of soybean seed varieties for the 2021 planting season. He said that while many growers had initially sought advice in selection of various Enlist technologies, which rely on the use of the 2, 4-D class of herbicides, interest has recently grown in XtendFlex technology, which tolerates use of dicamba herbicides.

In late October, the U.S. Environmental Protection Agency issued a five-year registration for dicamba formulations for use with various soybean and cotton seed technologies. The decision is the most recent twist in more than five years’ worth of legal challenges, rulings and reversals. Ross said he and his fellow researchers were also gearing up for the months following the completion of harvest, when agronomists typically work with the agricultural community to
update them on the latest research findings and help growers make decisions about the upcoming year.

“It’s been an odd year, and it’s going to be an odd winter,” he said, “with few face-to-face meetings and more virtual meetings and not being able to have those one-on-one contacts with producers. It looks like I’ll be on the phone a lot more with producers and consultants, trying to help them with their decisions.”

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