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Chicago-traded November soybeans have shed more than 11% since the start of the year, more than in most years, though not all market participants are convinced the highs are in.

CBOT November soybean futures on Wednesday managed to stay above their March 24 low, but they ended at $12.50-3/4 per bushel, the contract's lowest settle since July.

There are several parallels between the current U.S. corn market and the one in 2013, but a possible match for soybeans is less obvious. Fundamentally, 2013 or 2014 could be compared based on the expected build in supplies from tighter levels, though prices were rallying in early 2014.

In 2013, U.S. soy stocks for 2013-14 were initially seen doubling versus the prior year, though they eventually fell to 40-year lows as demand, specifically exports, was underestimated. However, Brazil has stolen a good chunk of global export share in the last decade.

Year-to-date declines in November soybeans are the second-largest of the last two decades after 2020 and slightly bigger than in 2019, though prices were in the mid-$8 range at this point in those years due to oversupply.

November soybeans' highest price yet this year of $14.15-3/4 per bushel came on Jan. 3, the first trading day of the year and the same day corn made its high. New-crop soybeans last printed a January high in 1999, one of three such instances in the last half-century.

The last time new-crop corn and soybeans both made their year-of-expiration highs in January was in 1985, though on different days. The last time beans made their high in the first session of the year was in 1975.

There is no instance back at least 50 years where soy and corn highs both came on the first trading day of the year, so 2023 could set a new precedent.

In the last two decades, June and November have been the most common months for new-crop soybeans' high, at five apiece. There were no April or January highs, but there was one in February (2019) and one in March (2004).

The 2013 and 2014 highs came in August and May, respectively, bookending the U.S. growing season. In a highly unusual twist, soybeans also made their yearly low in August 2013.

Soybeans versus corn?

Both new-crop soybean and corn futures are trading significantly below where they started the year, but is there room for fresh highs later this year? I asked my Twitter audience about this over the weekend.

On Friday I asked which of November soybeans or December corn is most likely to top their Jan. 3 highs sometime this year. Votes were split 50-50, but soybeans carried a slight lead for much of the poll duration.

The next day, I asked whether new highs were likely. Some 48% of the participants said the highs were already in for both corn and soybeans, but 32% of them thought both highs are yet to come.

The actual answer largely depends on U.S. harvest results, but other global factors may allow for imperfect U.S. crops. Chinese demand is a major item in question right now for soybeans, and the size of Ukraine's harvest and potential export program is a big unknown for corn.

One possibly helpful factor for soybean bulls is that the Brazilian harvest has passed, and although they remain low, soy basis levels at Brazilian ports have risen from last month's historically low levels.

However, that phenomenon has not yet been seen for Brazil's upcoming bumper corn harvest, which will be collected most heavily during June and July. This may be limiting to demand for U.S. corn, already struggling amid Chinese cancellations.

In the United States, analysts peg 2023-24 soybean ending stocks at four-year highs, up 38% from the current season and sub-300 million bushels for a fourth consecutive year.

U.S. corn ending stocks are seen at five-year highs in 2023-24, up 53% on the year. The U.S. Department of Agriculture will publish its first official 2023-24 estimates on Friday.

Although the new-crop U.S. bean balance sheet may be relatively tighter than that for corn on Friday, USDA's huge corn yield may be immediately thrown into question because of how far it is above the prior record. By comparison, the starting U.S. bean yield will probably be only a tick above the all-time high.

Source: XM