USDA pegged the final estimate for the 2014 soybean crop at 3.969 billion bushels, up 11 million bushels from the previous forecast. The national average yield was raised to a record 47.8 bushels per acre from the previous forecast of 47.5 bushels. Based on strong sales commitments, USDA raised its 2014/15 forecast of soybean exports this month by 10 million bushels to 1.77 billion. U.S. season-ending soybean stocks on August 31 are expected at 410 million bushels, unchanged from last month but well above the beginning inventory of 92 million.
USDA forecasts the U.S. season-average farm price at $9.45-$10.95 per bushel, compared to $13.00 for 2013/14.
Domestic Outlook
Current Demand for the Record U.S. Soybean Harvest Is Strong
In this month’s Crop Production–Annual Summary report, USDA pegged the final estimate for the 2014 soybean crop at 3.969 billion bushels. The estimate increased 11 million bushels from the previous forecast as upward revisions for Indiana, Ohio, and Missouri more than offset reductions for Iowa, Michigan, and Kansas. The national average yield was raised to a record 47.8 bushels per acre from the previous forecast of 47.5 bushels. The soybean crop was harvested on a record 83.1 million acres but that was 342,000 acres less than the previous forecast.
According to USDA’s latest Grain Stocks report, U.S. soybean stocks on December 1, 2013, totaled 2.524 billion bushels. Despite record use, the all-time high supply pulled up ending stocks for the first quarter of 2014/15 to an 8-year high. The year-to-year increase for the expected total soybean supply (4.076 billion bushels) is 506 million bushels (14 percent).
At 411.9 million bushels, U.S. soybean exports for November set an all-time monthly high. In December, soybean export inspections declined to 301.8 million bushels, still an all-time high for December. Cumulative export inspections for September-December 2014 were 218 million bushels above last year’s record pace. This prompted USDA to raise its 2014/15 export forecast this month by 10 million bushels to 1.77 billion, compared to 1.647 billion for 2013/14.
A slowing of the brisk export pace may set in before spring, however, as new sales commitments have begun tapering off. Soybean importers may already be well covered for their near-term requirements. A downward break in prices might stimulate renewed sales interest. But within a few weeks, robust export competition from a similarly massive new-crop harvest in Brazil will also commence. In addition, a strengthening U.S. dollar may have made importers hesitant to continue buying U.S. soybeans at the same tempo.
As of January 1, total sales commitments (the sum of cumulative shipments and outstanding sales) were only 90 million bushels above a year earlier. For China alone–which in recent years has accounted for nearly two-thirds of all U.S. exports–the year-to-year increase for 2014/15 sales commitments is 35 million bushels.
Domestic use of soybeans for 2014/15 was forecast unchanged this month. U.S. season-ending soybean stocks on August 31 are expected at 410 million bushels, unchanged from last month but well above the beginning inventory of 92 million. An ample supply has clearly pressured soybean prices well below the level of a year ago but strong first-quarter demand has provided support. Close to half of the soybean crop has been marketed through December at farm prices ranging from $10.00 to $10.25 per bushel. USDA forecasts the U.S. season-average farm price at $9.45-$10.95 per bushel, compared to $13.00 for 2013/14.
For soybean meal, higher U.S. imports were forecast for 2014/15 and would add to total supplies. Due to unusually large deliveries in October, the import forecast was raised to 250,000 short tons from 165,000 tons previously. The market outlook for domestic consumption of soybean meal this year is benefiting from a recovery in U.S. hog production.
The September-November 2014 pig crop expanded 4 percent from a year earlier while intended sow farrowing for December 2014-February 2015 is likewise 4 percent higher. Feed demand is also getting an assist from lower prices of corn and soybean meal. USDA raised its forecast of 2014/15 domestic soybean meal disappearance by 100,000 short tons to 30.2 million.
The outlook for the use of soybean oil in biodiesel has dimmed in the absence of an extension of the biodiesel blending credit through 2015 and the collapse of the support provided by diesel prices. Thus, USDA lowered its 2014/15 forecast of soybean oil use for biodiesel by 100 million pounds to 4.7 billion. Soybean oil prices fell again in December to 32.6 cents per pound, compared to the November average of 33.5 cents and the December 2013 price of 37.6 cents. This month, USDA lowered its forecast range for the 2014/15 average soybean oil price by 1 cent to 31-35 cents per pound.
Acreage Gains Buoy Canola Crop While Record Yield Edges Up Sunflowerseed Supply
U.S. canola production rebounded well in 2014/15 with a higher sown acreage. Despite spring planting delays in the Northern Plains, planted acreage increased 27 percent to a near-record 1.71 million acres. Canola yields, however, slipped in 2014 to 1,614 pounds per acre from 1,748 pounds in 2013 as dry weather slashed crop yields in Oklahoma. U.S. canola output expanded 14 percent to a record 2.511 billion pounds.
Recent additions to domestic crushing capacity will command more canola supplies than ever this year. The domestic crush for 2014/15 is seen at a record 4 billion pounds. A substantial surplus of canola remains in Canada so large U.S. imports (2 billion pounds) are still anticipated in 2014/15. Big crops in both countries have sharply reduced the canola prices received by farmers–currently $16-$17 per hundredweight versus the 2013/14 average of $20.60 per hundredweight.
Last fall, the U.S. sunflowerseed harvest increased 10 percent to 2.2 billion pounds. Most of the output gains stemmed from an increase in the national average sunflowerseed yield to 1,469 pounds per acre from 1,380 pounds in 2013. A much improved sunflowerseed yield in North Dakota helped its farmers account for nearly all of the gain in U.S. production.
In contrast, South Dakota production dropped with a steep decline in acreage there. Overall, U.S. sown acreage for sunflowerseed slipped 1 percent to 1.56 million acres. Lower oil-type acreage, which fell to its lowest level since 1976, offset higher acreage of non-oil-type sunflowerseed. These divergent acreage trends helped non-oil type sunflowerseed varieties account for 87 percent of the total gain in 2014/15 production.
Fewer oil-type supplies are expected to trim the 2014/15 crush by 10 percent to 915 million pounds. In contrast, exports of confection-type sunflowerseed could surge 36 percent to 350 million pounds. Overall, season-ending sunflowerseed stocks could decline slightly.
The acreage sown to flax in 2013 was sharply reduced by excessively wet soils in the Northern Plains but acreage in 2014 under better conditions rebounded by 72 percent to 311,000 acres. The U.S. flaxseed yield of 21.1 bushels per acre was close to its historical trend. Total flaxseed production in 2014/15 swelled to 6.4 million bushels from 3.4 million in 2013/14, with North Dakota accounting for virtually all of the gain.
Higher domestic flaxseed output could moderate 2014/15 imports from Canada to 4.7 million bushels, which if realized would be a 9-year low. Also, U.S. production of safflowerseed dipped 1 percent in 2014/15 to 209 million pounds as a lower yield offset a 3-percent increase in planted acreage.
Higher Acreage Raises Output of Peanuts and Cottonseed
U.S. peanut acreage in 2014/15 rebounded by 27 percent to 1.35 million planted acres, with Georgia accounting for most of the increase. On this basis, U.S. production soared 25 percent to 5.2 billion pounds, ranking it behind only the 2012 harvest. However, summer dryness curtailed peanut yields in the Southeast and trimmed the national average yield to 3,932 pounds per acre from 4,001 pounds in 2013/14. Even so, the 2014 yield was still the third-highest ever with record peanut yields set in Florida, North Carolina, Oklahoma, Texas, and Virginia.
Abundant supplies of peanuts are available to support demand this year. Slow but steady growth is anticipated for the domestic use of peanuts. In contrast, peanut exports for 2014/15 may decline moderately from the previous 2 years to 1.05 billion pounds. That would still represent the third-largest exports on record. So, season-ending stocks could end up 5 percent higher than last year’s carryout of 1.96 billion pounds.
U.S. cottonseed production for 2014/15 increased 26 percent from 2013/14 to 5.3 million short tons. A lower rate of acreage abandonment for cotton (particularly in Texas and Oklahoma) accounted for most of this season’s production gains. Estimated harvested acreage for cotton increased to 9.7 million acres from 7.5 million in 2013/14. California is an exception, where less cotton acreage was sown on account of severely restricted water supplies for irrigation.
Better supplies have eased cottonseed prices, which will aid a recovery in demand this year. Cottonseed crushing for 2014/15 is forecast up by 21 percent to 2.4 million short tons, while feed use could rise 18 percent to 2.65 million tons.
