An analysis of U.S. and World Soybean supply-demand factors and 2013 price prospects following the USDA’s March 8th World Agricultural Supply Demand Estimates (WASDE) reports and the USDA’s Ag Outlook Forum on February 22nd are on the KSU AgManager website (http://www.agmanager.info/default.asp).
Following is a summary – with the full analysis-article March 2013 for Soybeans is available at the following web address: http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp
On March 8, 2013 the USDA released its March World Agricultural Supply and Demand Estimates (WASDE) report. No changes were made in its estimate of supply-demand balances of U.S. soybeans for the “old crop” 2012/13 marketing year (i.e., MY 2012/13). The USDA estimated that there were no changes in 2013 U.S. soybean production of 3.015 billion bushels (bb), total soybean supplies of 3.204 bb, domestic crushings of 1.615 bb, exports of 1.345 bb, and seed and residual use of 119 mb.
Ending stocks of U.S. soybeans for “old crop” MY 2012/13 are projected to be 125 mb – down from 169 mb a year ago. Projected U.S. soybean ending stocks-to-use of 4.05% are a record low, and down from 5.4% in MY 2011/12 and 6.6% in MY 2010/11. The USDA also narrowed its estimate of U.S. average farm prices for soybeans for “old crop” MY 2012/13 to $13.80-$14.80 per bushel, with the range midpoint of $14.30 being unchanged and record high compared to $12.50 in MY 2011/12 and $11.30 in MY 2010/11.
May 15, 2013 article on “High Oleic Soybean Market Possibilities”
Source of image: http://www.unitedsoybean.org/
U.S. soybean price prospects in 2013 are likely to continue to remain high through the remaining winter, spring, and early summer months of 2013. Expectations of a large 2013 South American soybean crop and the availability of large exportable soybean supplies beginning in late March-April are likely to slow U.S. soybean exports considerably in spring 2013. Even so, World soybean export demand remains “strong enough” and World stocks appear likely to be “tight enough” that U.S. soybean prices will retain at least “moderate strength” until at least the 2013 U.S. soybean crop becomes available in fall 2013.
However, IF a large South American soybean crop DOES occur in 2013 in combination with either “trendline” or “above trendline” U.S. soybean yields in 2013, THEN a significant rebuilding of U.S. soybean ending stocks and sharply lower U.S. soybean prices would likely result by fall 2013 and on into the coming “new crop” 2013/14 marketing year.
USDA Projections: At the 2013 Agricultural Outlook Forum on February 22, 2013, the USDA made its initial projections of U.S. soybean supply-demand balances and prices for the “new crop” 2013/14 marketing year. The USDA projected a return to average crop yields (44.5 bu/ac) and larger production due to marginally higher U.S. planted and harvested acres in 2013. Soybean production is projected to be 3.405 bb, up from 3.015 bb in 2012. Through larger U.S. domestic crush (1.660 bb) and exports (1.500 bb), ending stocks of U.S. soybeans are projected to increase to 250 mb (7.6% S/U) for “new crop” MY 2013/14. U.S. soybean prices are projected to fall from $14.30 in “old crop” MY 2012/13 to $10.50 /bu in “new crop” MY 2013/14 due to at least partial rebuilding of tight U.S. and World soybean ending stocks.
KSU Projections for 2013 U.S. Soybean Markets: KSU forecasts are unchanged from February with 2013 U.S. soybean production and MY 2013/14 supply-demand and prices expectations as follows. A) “Short Yield” Crop Scenario: 20% probability of 2.926 bb U.S. soybean crop, 4.3% S/U, $13.50-$14.50 /bu prices; B) “Trendline Yield” Crop Scenario: 65% prob. of 3.350 bb U.S. crop, 7.4% S/U, $10.50-$11.50 /bu prices; and C) “Over Trendline Yield” Crop Scenario: 15% prob. of 3.465 bb 2013 U.S. crop, 7.5% S/U, $10.25-$11.25 /bu prices.
February 9, 2013 Article on Brazil soybean market prospects.
World Supply-Demand: Global soybean production in “old crop” MY 2012/13 is projected to be 268.0 mmt, down 1.5 mmt from February, but up from 238.7 mmt in MY 2011/12, and 263.6 mmt in MY 2010/11. Higher year-over-year projections of 2013 production and export prospects in Brazil, Argentina, and Paraguay are leading to higher World soybean supply-demand balances. World soybean % ending stocks-to-use for “old crop” MY 2012/13 are forecast to be 23.1% – up from 21.6% for MY 2011/12, but still down from 27.8% and 25.5% in MY 2010/11 and MY 2009/10, respectively – and up from the 5 year low of 19.6% in MY 2008/09.
Blog article on “Third World Soybean Development”