An analysis of U.S. and World Soybean supply-demand factors and 2014 price prospects following the USDA’s May 9, 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 Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on May 9, 2014, U.S. soybean market prices initially responded positively after having trended sharply higher since late January 2014. On May 9th the USDA made its first projections of “new crop” 2014/15 marketing year supply-demand and price projections for U.S. and World soybeans, and also made several important changes in “current” MY 2013/14 U.S. soybean supply-demand estimates. The USDA used U.S. 2014 planted acreage projections from the March 31st USDA Prospective Plantings report along with projections of record high 2014 U.S. soybean yields and production – figures that will need “good” 2014 U.S. growing conditions to be reached. In these “new crop” MY 2014/15 forecasts, the USDA projected record high U.S. and World soybean production, higher usage, increasing ending stocks, and lower prices versus a year ago.
A number of key soybean market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S. soybean planted acreage, and b) uncertainty regarding MY 2014/15 U.S. and World corn production prospects should an El Nino-related weather pattern occur in 2014 as is now forecast.
USDA U.S. Soybean Supply-Demand:
The USDA projected sharply higher U.S. soybean production, higher usage, a large increase in U.S. soybean ending stocks and % ending stocks-to-use, and markedly lower prices in “new crop” MY 2014/15 versus a year earlier. The USDA’s projected “new crop” MY 2014/15 supply-demand and price scenario is: 81.5 million acres (ma) planted, 80.5 ma harvested, 99.2% harvested-to-planted acres, record high 45.2 bu/ac U.S. yields, a record 3.635 billion bushel (bb) 2014 U.S. soybean crop, 3.780 bb total supplies, 1.625 bb exports, 3.450 bb total use, 330 million bushel (mb) ending stocks, 9.6% ending stocks-to-use, and $10.75 average price per bu. ($9.75 to $11.75). If forecast 2014 U.S. soybean production declines from this projection, then price prospects could improve considerably from these conservative early 2014/15 price forecasts. The USDA also made significant changes in the MAY WASDE from a month ago in its estimate of “current” MY 2013/14 imports (90 mb – up 25 mb), total supplies (3.519 bb – up 25 mb), crush (1.695 bb – down 10 mb), exports (1.600 bb – up 20 mb), total use (3.390 bb – up 30 mb), ending stocks (130 mb – down 5 mb), % ending stocks-to-use (a record low 3.83% – down from 4.02%), and prices ($13.10 /bu, up $0.10).
KSU Agronomic / Soybean Research Fields (Source: https://webapp.agron.ksu.edu/)
KSU U.S. Soybean Forecast for “New Crop” MY 2014/15:
KSU projections of “next crop” MY 2014/15 supply-demand balances and prices are as follows: a) “Likely Production” Scenario: 60% prob. of 81.5 ma planted, 98.7% harvested-to-planted acres, expected yield of 43.0 bu/ac, 3.460 bb 2014 U.S. production, 3.610 bb U.S. total supplies, 1.550 bb exports, 3.355 bb total use, 255 mb ending stocks, 7.6% S/U, & $11.55 /bu; b) “Low Production” Scenario: 20% prob. of 79.9 ma planted, 98.7% harvested-to-planted acres, low yields of 39.0 bu/ac, 3.076 bb 2014 U.S. production, 3.236 bb U.S. total supplies, 1.371 bb exports, 3.076 bb total use, 160 mb ending stocks, 5.20% S/U, & $13.75 /bu; and c) “High Production” Scenario: 20% prob. of 83.1 ma planted, 98.7% harvested-to-planted acres, yields of 44.3 bu/ac, 3.636 bb 2014 U.S. production, 3.781 bb U.S. total supplies, 1.600 bb exports, 3.455 bb total use, 326 mb ending stocks, 9.44% S/U, & $10.85 /bu.
World Soybean Total Supplies:
World Soybean supplies of 367 mmt in “new crop” MY 2014/15 are up from 341 mmt in “current year” MY 2013/14, and up from 321 mmt in MY 2012/13. Projected World soybean ending stocks of 82 mmt (29.3% S/U) in “new crop” MY 2014/15 are up from 67.0 mmt (24.8% S/U) in “current year” MY 2013/14, and up from 57.0 mmt (22.0% S/U) in MY 2012/13. Forecast total MY 2014/15 soybean production for major export competitors Brazil (91.0 mmt – up 3.5 mmt) and Argentina (54.0 mmt) is projected to be 7.6% higher in the coming year – with harvests available for use in the early months of 2015 to compete with the U.S. in World grain export markets. However, these projections are still uncertain given the possibility of a strong El Nino event beginning in mid-2014 which could affect both U.S. and South American crop prospects in 2014/2015.
Soybean Fields in the U.S. in 2012 (Source: http://www.agweb.com/blog/Syngenta_Field_Report_240/?Year=2012&Month=10)