In its September Crop Production report, USDA raised its U.S. soybean yield forecast for this year to 46.6 bushels per acre, which raises the 2014/15 production estimate by 97 million bushels to 3.913 billion. U.S. soybean exports for 2014/15 are forecast up this month by 25 million bushels to 1.7 billion. A higher demand for soybean meal may also raise the domestic soybean crush by 15 million bushels to 1.77 billion. Season-ending soybean stocks may surge to an 8-year high of 475 million bushels, which led USDA to lower its 2014/15 forecast of the U.S. average farm price by 35 cents to $9.00-$11.00 per bushel.
Domestic Outlook
Fine Summer Weather Swells U.S. Soybean Yields
Precipitation was 50-100 percent above normal for much of the Midwest in August. Coupled with seasonally normal temperatures, the moisture provided nearly ideal growing conditions for soybeans throughout the main period of pod development. In its September Crop Production report, USDA raised its 2014 soybean yield forecast to 46.6 bushels per acre.
September yield increases for Illinois, Missouri, South Dakota, and Iowa accounted for more than half of this month’s production gain. Crop yields are reduced only for Kansas and South Carolina, where dryness has worsened. Record yields are now anticipated for 7 of the top 10 soybean-producing States.
A higher soybean yield raises the U.S. production estimate for 2014/15 by 97 million bushels to 3.913 billion. This year’s output would eclipse the previous record (2009/10) by 16 percent. Soybean harvesting is well underway in Louisiana, Mississippi, and Arkansas and will spread throughout the Midwest over the next few weeks.
An ample U.S. supply of soybeans may garner most of the gains in world trade in the new marketing year. U.S. exports for 2014/15 are forecast up this month by 25 million bushels to 1.7 billion. A higher demand for soybean meal may also raise the domestic soybean crush by 15 million bushels to 1.77 billion. Based on strong sales to date, U.S. exports of soybean meal are forecast 250,000 short tons higher to a prospective record 12 million. Although soybean use is forecast up to an all-time high, season-ending stocks may surge to an 8-year high of 475 million bushels.
The outlook for a growing surplus of soybeans led USDA to lower its 2014/15 forecast of the U.S. average farm price by 35 cents to $9.00-$11.00 per bushel. In August and September, domestic shortages of soybean meal sparked a sharp price increase, with prices in recent days as high as $575-$585 per short ton. However, the rally should soon be cut short by the impending new-crop harvest.
The 2013/14 average price for soybean meal was revised up to $490 per ton, but the abundant crop is seen pressuring the 2014/15 average price $10 per short ton lower to $330-$370. Likewise, larger supplies of soybean oil are forecast to lower the 2014/15 average price by 1 cent to 34-38 cents per pound.
Southeast Dryness Likely Trimmed Peanut Yields
Crop conditions for peanuts deteriorated in August as dryness worsened in Georgia, Alabama, and the Florida Panhandle area. As of September 7, only 57 percent of peanuts were rated in good-to-excellent condition down from 68 percent on August 10. This month, USDA forecast a lower U.S.-average yield for peanuts at 3,800 pounds per acre and reduced the crop forecast by 107.5 million pounds. The U.S. peanut crop for 2014/15 is now seen slightly less than 5 billion pounds.
Peanut supplies, however, will remain comparatively large in 2014/15, which will support domestic use and exports throughout the year. Season-ending stocks may stay level with beginning stocks, which ended 2013/14 at 1.86 billion pounds.
For the cotton crop, conditions also deteriorated in the Southeast in August–contributing to lower yields. And, based on administrative data, USDA lowered its sown acreage estimate for U.S. cotton by 359,000 acres to 11 million. Both factors contributed to a lower forecast of 2014/15 cottonseed production. Forecast cottonseed output is lowered 313,000 short tons this month to 5.5 million, but that would still be a 30-percent increase from last year.
Harvesting in Texas was 13 percent completed as of September 7. The crop reduction is expected to curtail increases in the cottonseed crush and feed use. Prices for cottonseed, however, will be pressured by an unusually large supply of soybeans.
