An analysis of U.S. and World Soybean supply-demand factors and 2013 price prospects following the USDA’s February 10th WASDE report at World Agricultural Supply Demand Estimates (WASDE) reports is available on the KSU AgManager website (http://www.agmanager.info/default.asp).
Following is a summary – with the full analysis-article written for Soybeans with the full article now available at the following web address: http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp
When the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on February 10, 2014, U.S. soybean market prices initially responded in a neutral-to-positive manner. The USDA raised its projections of “current” 2013/14 marketing year U.S. wheat imports and exports with no change in U.S. soybean ending stocks – causing the wheat market to respond in a neutral manner the day of the report – but to trend higher in the week thereafter (i.e., Tuesday, February 18th). A longer term upward trend in CBOT soybean futures prices since January 30th has been due to both a) ongoing demand for U.S. soybean exports, and b) worries about South American soybean production and export prospects. Although it is early to form substantive forecasts regarding U.S. soybean acreage, growing season weather and crop development prospects, and expected demand factors for the upcoming “next crop” 2014/15 marketing year, the first formal USDA projections for U.S. soybean markets in the “next crop” 2014/15 marketing year will be made at the USDA Agricultural Outlook Forum on February 20-21, 2014 in Arlington, Virginia.
An Argentina Soybean Field in 2013 (Source: http://lacjournal.com/agrochemicals-linked-health-problems-argentina)
USDA Soybean Projection for “Current” MY 2013/14: Based on planted and harvested acreage of 76.5 and 75.9 million acres (ma), respectively, and U.S. soybean yields of 43.3 bu/ac, the USDA maintained its forecast of 2013 U.S. soybean production to be 3.289 billion bushels (bb) – up from 3.034 bb in 2012, and 3.094 bb in 2011. The USDA raised its forecast of “current” MY 2013/14 total supplies (3.459 bb – up 5 million bushels, ‘mb’). While no changes were made in proejcted domestic crush (1.700 bb), higher exports (1.510 bb – up 15 mb record high), and total use (3.309 bb – up 5 mb). As a result, “current” ending stocks were projected to be 150 mb – up from 141 mb in “last year’s” MY 2012/13, but down from 169 mb in MY 2011/12. Projected % ending stocks-to-use of 4.53% is marginally lower than 4.55% in “last year’s” MY 2012/13, and 5.35% in MY 2011/12. The USDA projected U.S. soybean prices for “current” MY 2013/14 to be $11.95-$13.45 /bu, up $0.20, but still down from the record high of $14.40 in “last year’s” MY 2012/13.
KSU U.S. Soybean Forecasts for “Next Crop” MY 2014/15: KSU projections of 2014 U.S. soybean production and “next crop” MY 2014/15 supply-demand and price scenarios are: a) KSU “Low Production” Scenario: 20% prob. of 77.5 ma planted, 76.5 ma harvested, 40.0 bu/ac yields, a 3.060 bb 2014 U.S. soybean crop, 4.5% S/U, & $12.00-$13.00 /bu; b) KSU “Likely Production” Scenario: 60% prob. of 79.0 ma planted, 78.0 ma harvested, 43.0 bu/ac yields, a 3.355 bb 2014 U.S. soybean crop, 7.7% S/U, & $10.00-$11.00 /bu; and c) KSU “High Production” Scenario: 20% prob. of 80.5 ma planted, 79.5 ma harvested, 44.3 bu/ac yields, a 3.513 bb 2014 U.S. soybean crop, 10.5% S/U, & $9.00-$10.00 /bu. An adjusted “next crop” MY 2014/15 projection in the February 13th USDA Agricultural Projections for 2023 with updates made by KSU for beginning stocks and prices would indicate the following for the coming year: 78.0 ma planted, 77.0 ma harvested, a record high 45.2 bu/ac yields, a 3.480 bb 2014 U.S. soybean crop, 5.3% S/U, & and approximate price of $10.25 /bu. These initial USDA 2014 acreage and production estimates are subject to change.
World Soybeans: Projected World soybean total supplies of 346 mmt in “current” MY 2013/14 are up from 322 mmt in “last year’s” MY 2012/13, and up from 309 mmt in MY 2011/12. Projected World ending stocks of 73.0 mmt (27.1% S/U) in “current” MY 2013/14 are up from 58.7 mmt (22.7% S/U) in “last year’s” MY 2012/13, and up from 53.4 mmt (20.8% S/U) in MY 2011/12 in comparison to the recent low 19.5% S/U in MY 2008/09.
Market Perspective: U.S. soybean prices have been supported by Chinese export demand and by U.S. farmer’s “holding” of soybeans in storage rather than selling at lower than anticipated grain prices. Weakness or at least “moderation” in soybean prices is likely to occur in the spring-summer of 2014 if a record high 2014 South American soybean crop is produced and moved into export channels in a timely manner, and if prospects develop through the summer months for a large 2014 U.S. soybean crop to be produced.
U.S. Soybean production (source: http://www.unitedsoybean.org/)