50 Years Ago: Soybean Price Cycles

Iain MacKay, FSC Board Member

50 Years Ago: Soybean Price Cycles

By Iain MacKay, FSC Board Member

In the January/February 1986 issue of Cycles magazine, Gertrude Shirk reviewed the performance of cycles in soybean prices previously discussed in Cycles 50 years ago, in the February 1976 issue.

The article made some short-term forecasts based on 12-, 38.6-, and 24.56-month cycles. I wanted to see if a calibration of those cycles made in 1986 would have given a helpful forecast for the time ensuing since.

Our data source is FRED, courtesy the Federal Bank of St Louis.

This is their monthly history of the Soybean Producer Price Index since 1947. They use 1982 as the base for the index.

FRED — Producer Price Index by Commodity: Farm Products: Soybeans

Note: This analysis uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.

In 2026 we can vibe code a model that best fits these three cycles to the period 1947 to February 1986 and see how well they have played out since then.

For convenience I used the price gradient (monthly proportionate difference) rather than the raw price, as it is less influenced by the long-term trend but should show similar cyclicity with price turning points occurring at gradient zeros.

A differential evolution algorithm calibrated the phase and amplitude of the gradients, using data from 1947 to 1986, which allows the cycle forecast gradient to be projected from 1986 to the present day and forward to 2030.

Here are the results of the projection, firstly for the last 50 years. The grey-shaded period shows projected gradient, with projected price highs and lows marked with red and green lines respectively.

Soybean Cycle Analysis: 1976 (Jan) - 2030 (Dec)

Looking more closely at the period 1980-2000:

Soybean Cycle Analysis: 1980 (Jan) - 2000 (Jan)

And the years 2020 to 2030:

Soybean Cycle Analysis: 2020 (Jan) - 2030 (Dec)

It is a matter of debate whether cyclic behaviour in financial time series is endogenous (down to the interaction of opposing forces within the system) or exogenous (driven by some external clock).

The distinction is more than academic, because the equations governing endogenous cycles are very sensitive to tiny changes in their parameters. Systems like these can be fundamentally chaotic and unpredictable. On the other hand, exogenous cycles endure over time, so they can be calibrated given sufficient data and they can be modelled with more tractable mathematics like Fourier analysis. While time-local circumstances can shift timing of individual cycles, in the long run the turning points for exogenous cycles remain close to predicted times.

Analysis like this brings evidence to the debate.

The work of the Foundation has identified many apparent exogenous cycles, the work to consolidate and explain them continues.

Iain MacKay Bio

Iain MacKay is the director and founder of Computable Functions Limited, which offers consulting in the application of advanced software technologies for market and survey research, as well as director and co-owner of X-MR Limited, a market research software development firm. MacKay was Deputy Chairman at Pulse Train Technology (now Confirmit), where he developed the company’s mainstream products for over 20 years. As director of UK development for Arbitron Corporation (now Neilson Audio), MacKay set up the development office in the UK. MacKay is based in the UK.

NOTE: Prepared by FSC Board Member Iain MacKay. The views expressed are his own and not investment advice. This article is intended exclusively to provide information and education to help individuals better understand cycles and the markets. However, this information is not to be construed as professional advice as to the buying and selling of securities or other investment instruments. In no event does the host express any opinion with respect to, or make recommendations regarding, the purchase or sale of any particular security or other investment instrument. There is a very high degree of risk involved in trading securities, and buying or selling decisions are solely within the personal discretion of each individual.