January 11, 2013

With reports that Brazil has begun to receive positive soy yields, the market sees a declination of soy futures prices.

"The market is all hinging on the South American weather. Are they going to see record production - that has been projected - or not? Right now the weather has turned favorable - they had some struggles early on - so it certainly has set a bearish tone in the soy market," said Darin Newsom, DTN senior analyst.

Newsom said that it was difficult to build momentum for soy bullishness in early January. The opportunity for China to start purchasing new soy from Brazil had arrived.

He suggested that March marked the last timeframe for 2012 soy to rally. The market will soon turn its attention solely to the 2013 soy crop.

In 2012, US farmers planted 77.2 million acres of soy and harvested 75.7 million acres. Average yield was 39.3 bushels per acre for total production of 2.97 billion bushels. The 2012 carryout ahead of the January 11 Crop Production final report was 130 million bushels.

On the CME Group exchange, the March soy futures contract traded at US$13.80, May at US$13.735, July at US$13.70, August at US$13.495, September at US$13.135 and November 2013 at US$12.85 per bushel on January 3, 2013.

Newsom encourages crop farmers to pay attention to rallies in the soy market.