USDA forecasts the 2013/14 domestic soybean crush 5 million bushels higher this month to 1.7 billion bushels. A higher crush would trim season-ending soybean stocks this year to a minimal 125 million bushels. Robust export commitments for U.S. soybean meal this spring led to a higher 2013/14 export forecast to a record 11.5 million short tons. Soybean oil exports for 2013/14 were also forecast higher–to 1.75 billion pounds versus 1.65 billion last month.
Domestic Outlook
Record Soybean Meal Exports in 2013/14 Support Demand by Soybean Crushers
Although U.S. exports of soybean meal are on a seasonal decline, they were still outpacing last year’s shipments throughout the spring–despite lower soybean stocks. Cargoes of U.S. soybean meal have filled in for a decline in trade from India and sluggish seasonal increases from Argentina and Brazil. U.S. sales to Southeast Asia have been particularly good.
Robust export commitments for U.S. soybean meal are forecast raising the 2013/14 total to a record 11.5 million short tons. However, exports of soybeans are forecast unchanged at 1.6 billion bushels as weekly shipments have slowed dramatically over the last 2 months. A shift in demand between foreign and domestic users is also signaled by soybean export bids that are now only modestly above the cash prices paid by domestic processors.
Soybean oil exports for 2013/14 were also forecast higher–to 1.75 billion pounds versus 1.65 billion last month. While overall export sales of soybean oil are lagging well behind a year ago, U.S. sales to China and a few South American and Caribbean countries have held up better than expected. In addition, better prospects for soybean oil output may not tighten oil stocks quite as much as previously anticipated. In May, soybean oil prices eased to an average of 40.7 cents per pound from the April average of 41.9 cents. USDA was prompted to lower its forecast of the 2013/14 average soybean oil price by 1 cent to 39 cents per pound.
The consequence of higher demand for soybean meal and soybean oil is stronger soybean demand by processors. Some seasonal slowing of the crush rate has occurred but it has not been as acute as previously anticipated. The domestic soybean crush for 2013/14 (September-August) is forecast 5 million bushels higher this month to 1.7 billion bushels.
USDA expects an even larger increase for 2013/14 production of soybean meal and soybean oil due to a 15-million-bushel increase for the October-September soybean crush. A higher crush would trim season-ending soybean stocks to a minimal 125 million bushels. Although cash soybean prices this spring in many locations have topped $15 per bushel, they may be close to a seasonal peak.
For new-crop soybeans, planting started fitfully in early May for northern parts of the country as frequent rain showers interrupted fieldwork. Over the second half of the month, periods of clear skies and warmer temperatures helped to accelerate planting. As of June 8, U.S. sown acreage for soybeans had advanced to 87 percent, compared to the 5-year average of 81 percent.
Now, soil moisture conditions throughout the Midwest and South are quite favorable for germination and early crop development. Soybean emergence as of June 8 had reached 71 percent compared to the 5-year average of 62 percent. Only 16 percent of the country’s soybean acreage is located in areas that are classified in a drought–predominantly centered in Kansas.
USDA kept its 2014/15 forecasts of soybean yields and production unchanged. It is too early to be predictive of yields but an exceptionally high 74 percent of soybeans are currently rated in good-to-excellent condition. In addition, excessively wet fields in parts of the upper Midwest pressed many farmers up against planting deadlines for full insurance coverage on some crops. Some spring grains acreage was likely prevented from being sown and may have been switched to soybeans. USDA’s Acreage report on June 30 could confirm this. The bright production outlook for soybeans may already be pressuring prices for new-crop futures contracts.
