KSU Soybean Market Outlook – September 2013

An analysis of U.S. and World soybean supply-demand factors and 2013 price prospects following the USDA’s September 12th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports can be found on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary of the article on Corn Market Outlook – with the full article and accompanying analysis to be available on by the afternoon of Friday, September 19th on the KSU AgManager website at the following web address http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp



On September 12, 2013 the USDA released its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports. Small offsetting changes were made in “old crop” 2012/13 marketing year U.S. soybean supplies and usage – leaving U.S. soybean “old crop” ending stocks and % ending stocks-to-use essentially unchanged.  Lower projected 2013 U.S. soybean yields and production together with reductions in soybean domestic use and exports led to a decrease in “new crop” 2013/14 ending stocks and % ending stocks-to-use, and an increase in projected “new crop” U.S. soybean prices.

U.S. soybean supply-demand projections for “new crop” MY 2013/14 are subject to change, as the USDA plans to make downward adjustments in 2013 U.S. soybean acreage in the upcoming October 11th USDA Crop Production and WASDE reports.  It is anticipated that these downward adjustments in U.S. soybean acreage will lead to even greater reductions in projected 2013 U.S. soybean production and to tighter U.S. soybean supply-demand balances for “new crop” MY 2013/14 than occurred in the September WASDE report. These changes are likely to provide continued support U.S. and World soybean prices in “new crop” MY 2012/13.


Soybeans in South Carolina (source: http://agriculture.sc.gov/fieldcrops)

USDA Soybean Forecast: The USDA projected that 2013 U.S. soybean production would be a 3.149 billion bushels (bb) – down 106 mb – but up from 3.015 bb in 2012.  This forecast was based on planted and harvested acreage of 77.2 and 76.4 million acres (ma), respectively, and U.S. soybean yields of 41.2 bu/ac – down from 42.6 bu/ac in August, but up from 39.6 bu/ac in 2012.  The USDA lowered its forecast of “new crop” MY 2013/14 total supplies (3.289 bb – down 107 million bushels, ‘mb’) along with domestic crush (1.655 bb – down 20 mb), and exports (1.370 bb – down 15 mb), leading to a decline in total use (3.140 bb – down 36 mb).  As a result, “new crop” ending stocks were projected to be 150 mb – down 70 mb from August, but still up from 125 mb last year.  Projected % ending stocks-to-use of 4.8% is down from 6.9% in August, and up from the record low of 4.03% in “old crop” MY 2012/13.  The USDA projected U.S. soybean prices for “new crop” MY 2013/14 to be $11.50-$13.50 /bu, up $1.15, down from the record high of $14.40 in “old crop” MY 2012/13.

KSU Soybean Forecast: KSU projections of 2013 U.S. soybean production and “new crop” MY 2013/14 supply-demand and price scenarios are:  a) “Low Yield-Production” Scenario: 25% prob. of 75.5 ma planted, 74.7 ma harvested, 39.0 bu/ac yield, a 2.914 bb U.S. soybean crop, 4.37% S/U, & $13.50-$14.50/bu;  b) “Likely Yield-Production” Scenario: 70% prob. of 76.1 ma planted, 75.3 ma harvested, 41.2 bu yield, a 3.104 bb U.S. soybean crop, 4.50% S/U, & $13.00-$14.00/bu; and c) “High Yield-Production” Scenario: 5% prob. of 77.2 ma planted, 76.4 ma harvested, 41.2 bu yield, a 3.147 bb 2013 U.S. soybean crop, 5.29% S/U, & $12.00-$13.00 /bu.


Brazilian Soybean Harvest in 2004 (source: http://chicagoboyz.net/archives/1908.html)

World Soybeans: Projected World soybean total supplies of 343 mmt in “new crop” MY 2013/14 are up from 322 mmt in “old crop” MY 2012/13, and up from 311 mmt in MY 2011/12.  Projected World ending stocks of 71.5 mmt (26.6% S/U) in “new crop” MY 2013/14 are up from 61.6 mmt (23.9% S/U) in “old crop” MY 2012/13, and up from 54.9 mmt (21.4% S/U) in MY 2011/12 in comparison to recent low 19.9% S/U in MY 2007/08.

Market Perspective: The strength of U.S. domestic markets that existed through the summer months of 2013 is now less likely to weaken considerably going into fall harvest due to U.S. crop problems. Both domestic crush and export demand for U.S. soybeans are more likely to remain strong through the coming winter months.  However, if a large South American soybean crop is produced in spring 2014, then just as occurred in 2013, U.S. soybean export demand may decline when 2014 South American soybean exports become available.  This assumes continued strength of soybean import demand from China and elsewhere in the World – and some improvement in Brazilian grain export logistical – handling bottlenecks in the coming year.   


Chinese Soybean Imports in 2009 (source: http://www.chinadaily.com.cn/bw/2009)


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