It is that time of year again.  Early October is the time in Ontario where soybean harvest is in full swing.  Soybeans can sneak up on you. They start turning sometimes in late August or early September and then with good weather there usually is an acceleration to the time when they are ready. However, even then they like to lie to you because sometimes the straw is green, but the beans are dry.  That can make those big combines growl.  That’s OK, growling is fine it’s when you hear the big booms that it isn’t so good.

Needless to say, in my career I’ve heard a few big booms, but it was quite a few years ago.  I’m referring to something foreign like a rock going into the combine or a big stick.  Back in the day we were wrestling with underpowered combines and steering the best we could. Oftentimes, you would miss something and that’s how it happens.  Today, with auto steer and better technology in the combine headers it’s a lot easier.  Let’s hope for no surprises.

Speaking of surprises, we have had an appreciation of the soybean futures price of about $0.90 since late August. With soybean futures usually getting to their low mark in October this has been unusual. However, I’m sure many of you would argue we’re still not high enough.  Soybeans are down $0.10 today. There’s not a lot of good reason other than the proverbial weather markets coming out of South America.

I have been reminded by my DTN colleagues that we have the highest ending stocks for soybeans in four years and in South America we’re looking at another record crop potential 19 MMTs more than last year.  Of course, they only have 4% of their crop planted. So maybe I better not get ahead of myself.

One variable in the grain markets that is always relevant but is always hot and cold is how our geopolitics affects our prices.  we have become accustomed to thinking about Russia and Ukraine and how that might affect world wheat markets.  In fact, many of you think but that bad news is dialed in even as those two countries launch missiles against each other.  That’s ongoing and as we go into colder weather nothing looks to change.

Keep in mind I am aware of regionally ignored global hotspots such as southern Sudan, Myanmar and in parts of Africa.  Those conflicts simply get ignored in the world’s media as they don’t have the strategic importance to the bigger powers. However, we all know the live fire that is going on now in places such as Lebanon, Israel, Gaza and Iran.  That has the potential to really disrupt the world if things go the wrong way.

What’s the wrong way? Well, keep in mind but these things are never simple but on the other end of all the bombs and all the missiles people are dying.  Mistakes can be made inevitably drawing in bigger powers which could easily have the capacity to rock our grain markets.  Keep in mind Iran has been a regular buyer in the export market for Ontario soybeans.

You could argue the geopolitics is always a default when it comes to how big of a factor it is in our grain markets. You realize that our American friends don’t sell the Iranians any grain.   Or at least I don’t think they do.  There are also other issues such as what we got going on in the European Union now where importing commodities that come from deforested land is going to be prohibited.  Soybeans and soybean related products are a big part of this.

I first learned of this from an Ontario soybean buyer who is concerned about soybean exports going into Europe especially when some of our land here is all deforested in some shape or form over a period of years. However, from what I understand it relates to relevant commodities that were produced on land that has not been converted from forest to agricultural use whether human induced or not after the date December 31st, 2020.  Clearly, that affects soybean products coming out of Brazil, Argentina and palm oil coming out of Indonesia and Malaysia.

Why is that? Well, it is what it is. The European Union is only reflecting some of the politics of the people that they represent.  Trees are important.  Who knew, there is such a thing as ethical soybeans. Maybe soybeans are not the same all around the world.

For the moment, I guess I’ll let that slide as the only soybeans I’ll be caring about in the next few weeks is the next 35 feet swath going through my combine.  Keep in mind there are thousands of farmers just like me all around the world hoping to do the same thing.  Finding our place in this market will continually be our challenge.