Based on my end of the month calculation using 2020-2021 marketing year average for the cmdty National Soybean Price Indexes, US stocks-to-use at the end of March continued to tighten. The NSPI showed a daily average of $11.76 for the 2020-2021 marketing, correlating to a 0.5% stocks-to-use calculation based on a study going back through 2013-2014. To find a marketing year with a similar price implied stocks-to-use situation, I had to go back to 2007-2008 when the average cash price was $11.73. The benchmark for tight US soybean supply and demand remains 2013-2014 with an average cash price of $13.18 implying ending stocks-to-use of 0.1%. Looking at the 2020-2021 situation, a couple things are clear:
- As discussed last month, the end of February numbers were cash price at $11.38 implying stocks-to-use of 0.7%
- This raises the question: Why were people surprised at the recently released USDA quarterly grain stocks number of 1.564 bb?
- For now, the uptrend in the cash market correlating to a tightening stocks-to-use situation is showing no signs of slowing
- The end of March found the cmdty National Soybean Basis Index calculated at 28.2 cents under May futures, as compared to the end of February’s calculation of 39.9 cents under (March).
- However, there is a possibility the cmdty National Soybean Price Index is nearing a major (long-term) top on its monthly chart.
