For the first time in a long time, a big U.S. soybean crop may not be getting bigger, according to crop production estimates released today by the U.S. Department of Agriculture.
In a surprising move, the USDA’s World Agricultural Supply and Demand Estimates held domestic soybean production nearly steady from its September estimate, but lowered ending stocks by 45 million bushels. Soybean prices on the Chicago Board of Trade spiked nearly 30 cents shortly after the report’s release, while traders quickly shifted their attention to planting progress in South America.
U.S. soybean production is forecast at a record 4.43 billion bushels. While up 3 percent from last year, the latest projection was a tick below September’s estimate. The USDA pegged the average U.S. soybean yield at 49.5 bushels per acre, down 0.4 bushels. In Iowa, the yield is forecast to be 56 bushels per acre, down one bushel from September’s estimate.
The USDA said ending stocks would total 430 million bushels, down from 475 million projected in September.
Iowa Soybean Association (ISA) staff, farmer members and market analysts offered the following perspectives on the heels of today’s report:
“The bottom line is we’ve got a good handle on yields and production has stabilized. Demand is steady and strong. The question then becomes: will demand be even stronger than projected right now? Because demand is so strong, if there are any weather issues in South America, that would attract additional purchases from the U.S. All eyes are on demand and South America right now.” -Grant Kimberley, ISA director of market development
“Even though we have surplus soybeans, demand is starting to cut into that carryover so any little hiccup in the weather anywhere will send the market higher. We also should be cognizant that we’re starting to get behind on harvest. If this wet, cold weather continues, it’s going to affect the quality of the soybeans coming out of the field, which could be another market mover.” -Dean Coleman, ISA member and farmer near Humboldt
“It’s the tale of two different crops. On the corn side, we were hoping to hold the number steady but instead, we have more production. That said, global carryover was lower so the report is viewed as neutral to slightly friendly for corn. Alternatively, for soybeans, I don’t expect too much more adjustment to the upside on production, as this crop is slower to mature than usual. For this reason, the overall soybean report is positive. From here, I’m concentrating on usage including feed demand and biofuels. The soybean export number is still projected to be a record and growing. Can we keep up the record exports in soybeans? That will be answered by China.” - Chad Hart, Iowa State University Extension and Outreach grain economist and crop markets specialist
For more information, visit www.iasoybeans.com.