An analysis of U.S. and World Soybean supply-demand factors and 2014 price prospects following the USDA’s March 10, 2014 WASDE report at World Agricultural Supply Demand Estimates (WASDE) reports will be 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 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 March 10, 2014, both “current crop” MAY 2014 and “next crop” NOV 2014 U.S. soybean market prices initially responded negatively – but have since traded in a volatile pattern due to various market factors. The USDA raised its projections of “current” 2013/14 marketing year U.S. soybean imports and exports, lowered its forecast of domestic crush, made a marginal reduction in “already tight” ending stocks, and raised its projection of U.S. average soybean prices by $0.25 per bushel.
The soybean market has recently focused on South American soybean production and logistical issues, reports of potential livestock disease and feed demand problems in China, and the ongoing strong pace of U.S. soybean export shipments and sales. While MAY 2014 soybean futures have been trading as high as $14.60 per bushel, “next crop” NOV 2014 futures have been trading as nearly as high as $12.00 – reflecting the expectation of a large 2014 South American crop to be harvested and sold into export channels to compete with U.S. exports later in the spring and summer months.
USDA Soybean Projection for “Current” MY 2013/14: With a 5 million bushel (mb) increase in imports to 35 mb, the USDA raised its forecast of “current” MY 2013/14 U.S. soybean total supplies (3.464 billion bushels or ‘bb’ – up 5 mb). Changes in domestic crush (1.690 bb – down 10 mb), exports (1.530 bb – up 20 mb to a record high), and total use (3.319 bb – up 10 mb), resulted in “current” ending stocks projected at 145 mb (down 5 mb) – still 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 4.37% are record low compared to 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 $12.20-$13.70 /bu (midpoint = $12.95), up $0.25, but still down from the record high of $14.40 in “last year’s” MY 2012/13.
KSU & USDA 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., 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, & $14.00-$15.00/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, 7.29% S/U, & $9.90-$10.90/bu; and c) KSU “High Production” Scenario: 20% prob. of 80.5 ma planted, 79.5 ma harvested, 45.0 bu/ac yields, a 3.578 bb 2014 U.S. soybean crop, 9.78% S/U, & $8.50-$9.50/bu. The “next crop” MY 2014/15 projection from the February 21st USDA Agricultural Outlook Conference with updates made by KSU for March 10th WASDE beginning stocks and prices would indicate the following for the coming year: 79.5 ma planted, 78.5 ma harvested, a record high 45.2 bu/ac yield, a 3.550 bb 2014 U.S. soybean crop, 8.16% S/U, & an approximate price of $9.85 /bu. These initial USDA 2014 U.S. soybean production estimates are subject to change.
World Soybeans: Projected World total supplies of 343 mmt in “current” MY 2013/14 are up from 321 mmt in “last year’s” MY 2012/13, and from 310 mmt in MY 2011/12. Projected World soybean ending stocks of 70.6 mmt (26.2% S/U) in “current” MY 2013/14 are up from 57.8 mmt (22.3% S/U) in “last year’s” MY 2012/13, and from 53.5 mmt (20.8% S/U) in MY 2011/12, being comparable to a low 19.5% S/U in MY 2008/09.
Market Perspective: U.S. soybean prices have been supported by Chinese export demand, recent problems in South American soybean production, and by U.S. farmer’s “holding” of soybeans in storage. 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.
Early Planting of Soybeans in Illinois in late April 2012 (Source: http://farmindustrynews.com/blog/very-early-planting-illinois)
KSU Soybean Variety Performance Trials in 2012 (Source: http://www.agronomy.ksu.edu/extension/p.aspx?tabid=94)