What is in this article?:
- A look at world soybean markets.
- What would it take to turn the market bullish?
It’s unhappy news but those looking for a quick cure to what’s ailing the soybean market are likely to be disappointed.
“At the end of the 2013 marketing year, we had record-low U.S. ending stocks at 91 million bushels,” said Scott Stiles, Arkansas Extension agriculture economist, at the recent Tri-State Soybean Meeting in Stoneville, Miss. “At the same time, there was a peak demand for corn for ethanol. So, for the past two years we’ve had north of 83 million acres planted here in the United States.
“You may not be aware that in 2015 we had 2.2 million acres of prevented planting soybeans in the United States. We’d have had record soybean acreage if everything had been planted as intended.”
Stiles took it a step further. “If we’d harvested those 2.2 million acres, instead of a projected 465 million bushels carryover, we’d be looking at a figure some 100 million bushels more.”
Following the historic 2012 drought in the Midwest there have been three years in a row of trend yield, or better. The USDA says the 2015 national average yield is 48.3 bushels.
“The odds are beginning to say chances are slim we’ll do it four years in a row. Some weather models show that by the end of next summer the western Corn Belt will begin to see heat and dryness. So, this may be the year that market patience might pay and not being too aggressive on the front end. There may be some marketing opportunities at the end of the summer given what some of the models are saying.”
The USDA’s National Agricultural Statistics Service (NASS) projects that 10 states will have record soybean yields for 2015. “And some of those are big acreage states. Iowa, Illinois and Nebraska all are expected to have average yields of 56 bushels. Minnesota’s average is at 50 bushels. The western Corn Belt had great conditions and yields in 2015.”
Meanwhile, Brazil is working on its fourth year of record production. “So, the supply issue isn’t just here in the United States. Globally, we’re seeing record levels of world ending stocks.”