Harvest Pickup Could Hold Back Prices

USDA will likely up its estimate of soybean stocks.

Even if world markets weren't in limbo right now, these likely would be slow times in the soybean trade. Leaves are dropping rapidly and farmers are starting to cut the 2008 crop in earnest. Most of the crop will end up in storage, but enough will hit the scales to refill a pipeline that badly needs new crop supplies.

The lack of beans available to the market at the end of the crop year — and how that's changing — was seen dramatically last week. Crush for August was off sharply, according to a Census report, and shipments of beans were paltry. As a result, USDA is likely to up its estimate of Sept. 1 stocks when it updates inventory on Tuesday.

Tight supplies supported basis this summer, but that changed dramatically last week. Cash broke hard in most places as buyers finally rolled nearby bids to new crop. That weak basis should continue to make storage attractive.

Still, those beans could see $9 in 2009, or $20, or perhaps both. To read Bryce Knorr's complete weekly soybean review, click HERE.

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