Heat Stress for Soybeans

The weekly Grains Inspection for Export report released yesterday was optimistic and we saw weekly soybean export volumes to Mexico and Southeast Asia increase. However, falling crop conditions accounted for the majority of the morning’s gains in the soy complex.

Prices in the deferred contract months approached the $14/bushel benchmark. Meanwhile, in the crop progress report, the USDA decreased the weekly ratings for soybeans by 2%, with 58% of U.S. soybeans in good to excellent condition. Trade estimates had pegged the total between 59% and 62%. 

Heat stress continues to accelerate crop development above historical benchmarks. As of July 25, 76% of 2021 soybeans were blooming, up 13% from the week prior and 5% ahead of the five-year average. About 42% of soy plants were setting pods as of Sunday, which is a 19% weekly increase and 6% ahead of the five-year average.

The falling condition rating, which is largely a result of the heat wave across the Upper Midwest last week, is not good news for farmers still hoping for average yields this year. Soybeans typically do not pollinate until early August so farmers are hoping that conditions improve before this critical reproductive stage. If conditions do improve, there is a higher chance of larger yields to market later this fall.