Soybean Market Outlook – October 29, 2012 (via KSU AgManager)

An analysis of U.S. and World Soybean supply-demand factors and price prospects has been placed up on the KSU AgManager website (

Following is a summary – with the full analysis-article for Soybeans to be found here.



United States: In the October 11th Crop Production report, the USDA raised its projection of “new crop” 2012 U.S. soybean production by 9% or 226 million bushels (mb) up to 2.860 billion bushels (bb).  It also increased is estimate of “old crop” 2011 U.S. soybean production by 38 mb up to 3.094 bb.  The result was to increase projections of U.S. soybean ending stocks for both marketing years.

In a reaction resembling “reverse price rationing” or “un-rationing”, increases in projected 2012 production and “new crop” MY 2012/13 total supplies caused associated increases in forecast usage of U.S. soybean domestic soybean crush and exports.  The increase in projected “new crop” U.S. soybean supplies were projected to be almost all “used up”, with only a small increase in “new crop” ending stocks (up 15 mb) resulting from the much larger increase in total supplies (up 265 mb) since the September WASDE report.

The USDA increased its “new crop” 2012/13 marketing year forecasts from a month ago for beginning stocks (169 mb – up 39 mb), total supplies (3.050 bb – up 265 mb), domestic crush (1.540 bb – up 40 mb), exports (1.265 bb – up 210 mb) and total use (2.920 bb – up 250 mb).  The strong early marketing year pace of U.S. soybean exports was the reason for the sizable increase in projected “new crop” MY 2012/13 exports to 1.265 bb.  However, U.S. export sales are expected to decline markedly once South American supplies become available in the spring of 2013.

“New crop” MY 2012/13 ending stocks are projected to be 130 mb – up 15 mb from September, with % ending stocks-to-use projected to be 4.45% – up from 4.31% a month ago.  Projected %S/U of 4.45% nearly equal to historic “tight” U.S. ending stocks-to-use levels of 4.53% in MY 2007/08, 4.49% in MY 2008/09, and the previous record low of 4.45% S/U in MY 2003/04.  The key “big picture” issue to remember is that U.S. soybean stocks are projected to be down to essentially minimal carryover levels in the “new crop” 2012/13 marketing year, with little “room” or margin for error from potential U.S. or South American (impacting U.S. exports) soybean production problems in 2013.

The USDA lowered its forecast of “new crop” MY 2012/13 soybean prices to $14.25-$16.25 per bushel – down $0.75 on each end of the range from a month ago.  This level of U.S. soybean prices would still be a record high compared to the previous high of $12.50 /bu in “old crop” MY 2011/12.

World: Consistent growth in World soybean use since MY 2008/09 has occurred in spite of periods of record high soybean prices, with further growth projected to 258.8 mmt for “new crop” MY 2012/13.   Near record high World production of 264.3 mmt is again projected for “new crop” MY 2012/13.

Projections of more abundant South American soybean supplies in World markets in “new crop” MY 2012/13 – to be harvested in Argentina and Brazil in Spring 2013 with associated lower prices to result – has led to a forecast of record high World soybean exports of 96.2 mmt, up from 91.5 mmt in “old crop” MY 2011/12 and 92.7 mmt in MY 2010/11.  After declining in “old crop” MY 2011/12 to 54.8 mmt, World soybean ending stocks are projected to increase to 57.6 mmt in “new crop” MY 2012/13, with projected ending stocks-to-use climbing to 22.2% from 21.6% the previous year.


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