As soybean farmers look to plan this year, they will face multiple unknowns.
Carrie Litkowski, a senior economist and program leader in the U.S. Department of Agriculture’s resource and rural economics division, the farm income team leader, noted that in 2025, grain total cash receipts from commodity sales are expected to decline about $1.8 billion. A silver lining is that total production costs are expected to decline by $2.5 billion.
Cash receipts from agricultural commodities, most notably corn and soybeans, are forecast to decline slightly, with crop receipts forecast to fall by 11% in 2024 and another 5% in 2025.
Naomi Blohm, a market analyst with Total Farm Marketing by Stewart Peterson, West Bend, Wisconsin, and a monthly contributor to High Plains Journal, said the fundamentals are balanced right now for soybeans, and a recent rally was justified thanks to a January USDA report that showed lower yields and lower ending stocks. (The photo above is courtesy of Adobe Stock.)
For prices to climb, it will require a combination of no trade war with China, new export demand, bad weather in South America and signs of good news on the biofuels mandate. Also, poor weather in the U.S. this spring or summer has to be included, she said.
“If those things can occur, soybean prices could rally significantly higher thanks to surprisingly tighter U.S. carryout for beans from the January USDA report,” she said.
On the flip side, there are significant negative aspects, which include record large global ending stocks. Additionally, the funds are now long in the soybean complex with the recent buying.
“If a trade war occurs with China, they may exit. if there is not bad weather in Brazil in the coming weeks that might weigh on price,” Blohm said. “We are looking at a well-balanced scale for fundamentals at the moment. Which way will the scale ultimately tip?”
Blohm and other market analysts have taken note of the potential impact of tariffs.
Chad Hart, a professor in agricultural economics at Iowa State University, said producers will need to watch for signals in the upcoming months, and that includes watching China and Mexico.
“The soybean market will definitely swing with the imposition of tariffs,” Hart said. “China is the largest export market for U.S. soybeans, and Mexico is the third largest. The talk of tariffs has weighed down on soybean prices.”
As of mid-February, the tariffs have not directly hit soybeans, but if that conversation continues, soybeans will become a direct target, Hart said.
“On a more positive note, domestic crush continues to increase as more crush facilities open up,” Hart said. “This growth can soften the blow from tariffs. Another factor producers should watch as they move through the year will be drought conditions. Weather troubles could provide some marketing opportunities, especially if soybean planting declines dramatically.”
Dan O’Brien, a professor and Extension agricultural economist with Kansas State University, said growers should watch the progress of the South America soybean crop from now through harvest. USDA will be making monthly projections for March through August, but if good or bad crop production conditions occur in Brazil and/or Argentina, in-country analytical sources are likely to provide quicker and more responsible signals for larger or smaller crop prospects and inversely related pricing responses.
Pricing opportunities
With prices currently at about $10 a bushel, Hart was unsure what the floor price can be, but, given the size of the export segment, there is a possibility of lows hitting into the $8 to $9 a bushel range. A ceiling could be $11.25 to $11.50 a bushel range unless there is a large-scale drought problem.
While current prices are lower than production cost estimates, Hart said time is still on the producer’s side.
“Even in rough financial years, there will often be short opportunities to catch prices at or near breakeven,” Hart said.
Typically, these opportunities come during and slightly after planting, when weather concerns often lead to weather premiums. A short option can be used as price protection in case a price does decline.
“Soybean producers need to be ready and willing to pounce on those opportunities if they present themselves,” Hart said.
Depending on South American weather, potential trade wars or a competition for acres in the U.S. and summer weather in the U.S., the potential upside for new crop beans could be near $11.50 a bushel on the high end with friendly fundamentals, Blohm said. They could also fall to $9 a bushel if negative fundamentals unfold.
O’Brien said trying to project a floor or ceiling is difficult, but he noted there have been price opportunities when least projected.
If a severe crop problem were to develop for U.S. or South American soybeans—and cause panicked responses—that could mimic the situation in summer 2008, with historic highs in CME soybean futures, which climbed to $16.36 a bushel. In 2012, a drought year, the price reached $17.89 a bushel, and in 2022, the Black Sea war between Russia and Ukraine caused the price to reach $17.59 a bushel.
Lows in the soybean futures have been at $7.87 a bushel in the fall and winter of 2008, he said, $8.44 a bushel in fall 2016 and $7.91 a bushel in spring 2019. The 2024 monthly low average price was $9.55 a bushel this past August.
Growers also have to contend with other factors, Hart said. While there is some uncertainty on the biofuels front, soybean crush has continued to grow.
“That growth will likely slow in 2025, but I don’t think it will reverse, so this should translate into larger domestic use for soybeans,” Hart said. “The main challenge is that export shifts could swamp that growth.”
Biofuels remain a long-term friendly story, but there are so many political hurdles to jump through first, Blohm said. “Look for a slow friendly story to continue to unfold over the next decade,” she said.
O’Brien said until the Trump administration provides clarification of its bioenergy
Policies, the future remains uncertain.
If a grower has a renewable diesel or biodiesel plant that is reasonably close to his on-farm storage, O’Brien said that is a marketing strategy he can consider.
He also noted Bartlett recently opened a soybean crush plant in Cherryvale, Kansas, that can provide a strong effect on basis and cash bids for that region.
Blohm also noted that the strength of the U.S. dollar can hinder export opportunities. The Brazilian real, the official currency of that country, is historically low and gives those farmers an advantage. While in recent years the strength of the U.S. dollar has made exports more difficult, Hart said that in 2025 the more pressing concern is tariffs that could alter foreign sales.
Dave Bergmeier can be reached at 620-227-1822 or dbergmeier@hpj.com.
