Soybean prices climbing due to South American weather

Feb 07, 2022

Prices neared $16 per bushel on Monday afternoon

By Diego Flammini
Staff Writer
Farms.com

Weather issues in South America are contributing to higher soybean prices.

As of about 12:30pm ET on the Chicago Board of Trade on Monday, soybean prices were at $15.83 per bushel.

Argentina and Brazil, South America’s largest soybean-producing countries, are amid dry weather, said Moe Agostino, chief commodity strategist with Farms.com Risk Management.

“It was a very dry December for parts of Brazil and Argentina,” he said. “Some rains did come in the second half of January to improve crop conditions a little bit but nothing more.”

A second consecutive La Niña is causing the dry weather.

In December, NASA announced La Niña is expected to remain until at least this spring.

A back-to-back La Niña hasn’t been seen in multiple years, Agostino said.

“You’re talking back to 2012,” he said. “You get some periodic rains, but that’s all they are. Then the pattern turns to hot and dry again, which is where we’re at now.”

Markets are concerned with how this weather will affect production.

Both Brazil and Argentina’s estimated production have been reduced by millions of metric tons, Agostino said.

“We’ve reduced Argentina’s production by about 8mmt,” he said. “The original projection was 50mmt and now we’re down to 42mmt. For Brazil, the soybean crop started at 145mmt and now we’re somewhere between 120 and 125mmt.”

Those numbers equal about 30 million metric tons of soybeans.

“That’s almost 1.3 billion bushels,” Agostino said. “Who’s going to replace that?”

And prices could go up even further if a major soybean consumer comes to the table.

China is the world’s largest soybean user and the country needs soybeans.

Chinese buyers were waiting for the South American crop to come in. But with weather challenges hindering the crop, farmers could see prices go even higher.

“What’s not factored into this price appreciation is Chinese buying,” Agostino said. “I think they were waiting for the South American crop and that looks like it could be a mistake on (China’s) part. If they show up, get ready for higher prices.”

Farmers may be tempted to lock in a price now.

But a little bit of patience could pay even more dividends in the future, Agostino said.

“This is an inflationary year and money is flowing out of stocks and into commodities,” he said. “You pair that with the environmental issues and it’s a perfect storm leading to higher prices. You could be looking at $20 (per bushel) beans if you’re patient.”

Video: Turning Plant Defense Into a Management Strategy

Turning Plant Defense Into a Management Strategy

Understanding how a plant responds to stress is one thing.

Using that knowledge to make better management decisions is another.

Systemic acquired resistance, or SAR, is the plant's more direct defense response. When stress or infection occurs, the plant begins signaling throughout its system and preparing defensive compounds.

But if we know that response exists, can we help prepare the plant before the stress arrives?

The answer starts with understanding what triggers the response and what the plant needs to carry it out.

The Trigger and the Fuel

Salicylic acid plays an important role in triggering the SAR pathway.

Think of it as turning the truck on.

The engine may be running, but it still needs fuel to do the work.

In this case, manganese plays an important role in supporting the enzyme systems involved in the plant's defensive response.

This makes manganese status an important part of the conversation. Whether a producer is using tissue testing, sap analysis, or simply scouting for visible deficiency symptoms, the goal is to make sure the plant has adequate manganese available.

Manganese is required in relatively small amounts, but that does not make its role small.

If the plant receives a signal to defend itself but lacks the nutrition needed to support that response, it may struggle to carry out the process efficiently.

The trigger matters.

The fuel matters too.

Prepare Before the Stress Arrives

The best time to think about stress management is before the plant is overwhelmed.

Once a crop is already struggling, management can quickly turn into a game of catch-up.

This is similar to nitrogen management. Once a plant becomes severely deficient, correcting the problem does not necessarily erase the time and yield potential already lost.

Plant defense can work the same way.

Low-rate, targeted approaches designed to support the SAR pathway may fit best ahead of an expected stress event rather than after significant damage has already occurred.

That requires producers to think about predictable stress.

We may not know exactly what the weather will do tomorrow, but we generally know summer heat is coming. We know certain field conditions increase disease pressure. We know a herbicide application can temporarily stress a crop as the plant processes the chemistry.

Even a properly timed and labeled herbicide application can create a temporary response in the plant.

That does not mean the herbicide is bad.

Weeds can create significantly more yield loss than the temporary stress caused by controlling them.

The question is not whether we should eliminate every stressor.

The question is whether we can better prepare the plant to manage necessary and predictable stress.

Not All Stress Is Bad

Stress is a normal part of plant growth.

A perfectly stress-free environment does not exist in the field.

In fact, some stress is necessary for normal plant development. A plant responds to wind, temperature, moisture, sunlight, and countless other environmental signals throughout the season.

The environment is stress.

The plant's job is to manage it.

Problems begin when the stress load becomes greater than the plant's ability to respond.

Extreme heat, drought, high salt concentrations, disease pressure, and even certain management practices can add to that load.

This is where understanding SAR becomes useful.

Instead of waiting until the plant is visibly struggling, producers can begin identifying periods when stress is likely and make management decisions around those windows.

ISR Starts With the Soil

While SAR is a more direct defense response, induced systemic resistance, or ISR, brings the conversation back to soil health.

The longevity of a farm is closely connected to the health of its soil.

Carbon plays a major role because it supports biological life within the soil. Bacteria, fungi, and other organisms interact with plant roots and influence how the plant grows, accesses nutrients, and prepares for stress.

This is why soil health cannot be reduced to one product or one application.

It is a system.

Keeping living plants in the field longer can support biological activity. Cover crops may fit some operations. Better water management can improve soil conditions.