Soybeans should lead the way toward higher prices in the coming months, due largely to friendly supply and demand numbers, according to Brian Hoops, a grain analyst with Midwest Market Solutions.

Hoops, speaking at a Minneapolis Grain Exchange press briefing on USDA’s Nov. 9 Crop Report and World Agricultural Supply and Demand Estimates, noted that declining soybean yields which brought production down to 3.375 billion bushels, “makes ending stocks a very tight 185 million bushels.”

USDA also increased soybean exports by 50 million bushels to a record 1.57 billion bushels. “The real story here is demand. USDA has underestimated final demand in November for 15 out of the last 20 years. Now we can probably make that 16 out of 21.”

The strong demand should push prices higher, according to Hoops.

“I think you have to look at the soybean market trying to push higher and make new highs as we reach the end of the year. It’s unlikely that we’re going to see major setbacks in the soybean markets, other than profit-taking pullbacks. The end users will be there aggressively buying and supporting the market because of our strong exports to China.”

Soybean prices aren’t likely to exceed the all-time high of $16.60, “which would be a $4 rally from here,” Hoops said. “You would have to have an acreage battle or South American weather problems to push into that area. At some point, China will slow down their buying from the United States and shift to South America, if they have a good crop. I would look for price appreciation during the winter of $1 to $2.”