The soy complex saw values rally to new highs last week, bolstered by positive news regarding a plausible COVID-19 vaccine and soybean/soybean meal supply reductions for 2020/21. A downward technical correction lasted for a couple days after WASDE, but Jan-21 soybean futures closed the week higher than the prior Friday by $0.47 per bushel. Jan-21 soybean meal prices climbed $5.30 per ST, and soybean oil futures were higher by $0.0176 per pound, or 5 percent.
In Brazil, soybean planting is 84 percent complete compared to 89 percent last year, so beans should get planted in most of the country. Nonetheless, the concern remains that dry weather through December could hurt yields, which are currently projected to average around 51 bushels per acre.
For the U.S., the soybean balance sheet is growing dangerously tight. Considering demand projections for 2020/21, nothing on it appears unreasonable. Soybean crush is only projected to grow by 25 million bushels from 2019/20. Exports are expected to rebound by over 30 percent from the year prior but total export commitments for 2020/21 are already at 85 percent of the forecast.