Funds Now Net Long: Last week's strong +63,445 contract buying in soybeans, driven from USDA's 1/10 report, was important for a few reasons. It was the largest single week of buying since 5/7. That also helped to push their position to a light net long. That is their first long position since 12/26/23. Lastly, last week's strong buy also had a good deal of market acceptance. The Tuesday to Tuesday gain of +50 ¼ cents was the best weekly gain since 6/6/23.

Basis Now Past Its Peak: Soybean basis likely peaked for the year last week. At one point it had appreciated 35 cents from the harvest low. But now, it has widened a full 10 cents from that peak. Soybeans are following the general pattern from heavy supply years quite well. If this holds, we should expect one last minor rebound in early March. After that, that's it.

Brazil Production: Abiove, the Brazlian oilseed association, raised its estimate of soybean production from 168.7 million tonnes last month to now 171.7. They are midpoint in the trade range.

Acreage: We have been told that Informa/Sparks/IHS Markit has lowered their 2025 soybean acreage view from 84.0 million in December to now 83.3. They are now at -3.8 million vs. 2024. Allendale's official view, to be released at Thursday's AgLeaders Conference, is 83.5. That would be -3.6.

USDA's Production View: A large surprise was also seen on 1/10. The fall 2024 production estimate was lowered by a sharp -95 million bushels. That was the largest decline ever on a January report. This production change was made with planted acreage -50,000 and harvested -221,000. Yields were lowered from 51.7 bpa to 50.7. This new yield is -3% from USDA’s view of starting trend, 52.0.

USDA's Low US Stocks: On 1/10 USDA dropped production but made no offsetting changes to crush or exports. That was positive. Ending stocks were lowered from 470 million last month to now 380. Ending stocks have posted a good decline from the peak of the year, 560 million back in August.

Soybean Pricing: We still have little confidence over the soybean balance sheet. If USDA's 380 stock estimate were left by itself, futures pricing would be $11.30. For soybeans, we feel comfortable with a trade risk discount of around 80 cents. That would imply the market may allow trade up to $10.50.

Brazilian rains over the past four weeks were -35% from normal. Actual rains have been below the forecast. Of light note, they are still getting 1 inch per week so let's not raise large concern. Additionally, this has come with lightly below normal temperatures. Reproduction, when weather really matters for yield determination, is here in January and February. The current forecast is strong at 3.2 - 7.0 inches over two weeks. Last week the far south was running below that amount. The current forecast shows them in line with the others. The average rain over two weeks ahead is 3.8.

Argentine rains were -50% from normal over the past four weeks. Argentina is different than Brazil. This is not 50% of a heavy 1.9 inch weekly norm. This is -50% from a weekly norm of 1.0 inch. The trade has light concern. The two week rain forecast ahead suggests 0.2 - 0.6 for 50% of the growing region and 1.1 - 1.8 for the remainder.  The norm for these two weeks is 2.0. Weather is a little more important now. Yield determination is in January and February.

Pricing: USDA currently estimates 380 million bushels for ending stocks. Allendale's pricing models suggest 400 million ending stocks implies 1110 futures, 450 implies 1080, 500 implies 1040, 550 implies 1005 and 600 implies 975. We expect pricing to remain under value for several weeks until trade policy is clarified.

Chart: Wait, what? Soybeans are in an uptrend? That appears to be the case with today's push to new highs for the uptrend. This is the best pricing since early October. We have not made our first close over the high from November, 1055. Next resistance is the September high, 1100 1/4. One bear issue to note. We left a gap from Friday's 1034 close. That will be a target if/when the news flow changes...Rich Nelson

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