Nutrition

News 282 views last update:7 Aug 2012

US soybean acreage drops to 12-year low

The USDA's Acreage report in June showed that 64.1 million acres were sown to soybeans in 2007. With an unchanged yield outlook, the lower acreage for soybeans reduced the 2007 production forecast by 120 million bushels to 2.625 billion.

The tighter outlook for the 2007/08 supply raised the forecast of the national average farm price this month to $7.25-$8.25 per bushel. Higher prices are viewed curtailing US soybean exports in 2007/08 to 1.02 billion bushels from the June forecast at 1.08 billion.

 

South American soybean stocks to pressure US exports
Now that soybean harvests in Brazil, Argentina, and Paraguay have concluded, each country has abundant stocks that need quick disposition.

In anticipation of potential price gains from any adverse summer weather in the United States, South American producers may not quite finalize their crop sales.

By the last quarter of this year, however, the soybean price level should be defined well enough to rapidly accelerate the conclusion of farm marketing.

Unlike US producers, who have the advantages of greater crop storage, delivery points, and a marketing loan program, South American farmers have fewer incentives to hold stocks and will respond more directly to strong current prices. Deliveries of South American soybeans to the export market should strengthen considerably into early 2008.

In Brazil, strengthening exchange rates will also urge soybean farmers to sell. The projection of 2007/08 soybean exports from Brazil, at 29.7 million tons, is 21 percent higher than the 2006/07 forecast.

Record crop in Argentina
For Argentina, the estimate of 2006/07 soybean production was raised this month to a record 47.2 million metric tons from 46.5 million. By October 2007, nearly 23 million tons is expected to remain on hand from this bumper harvest.

Reducing the soybean stocks next year toward a typical April carryover of around 1-2 million tons implies that crushing and exports are capable of unprecedented strength over the next 9 months.

Argentine soybean exports are forecast to advance to 8.0 million tons for 2006/07 and 10.2 million for 2007/08. For the current year, slightly more soybean exports may arise due to recent constraints on power use by Argentine processors.

Nevertheless, crushing could swell considerably into the first half of 2007/08, and climb nearly 14 percent for the entire year to 38.5 million tons.

Reduction in global stocks
The expected tightening of soybean stocks in the United States, Brazil, and Argentina brings the projection of 2007/08 global ending stocks down to a 3-year low of 51.9 million tons.

This would represent a 19-percent reduction from the current year's expected record.

Growth in global soybean meal demand could be maintained by the expected rate of soybean use. But soybean oil stocks could continue to tighten in 2007/08, with demand likely to outpace production. Price gains for soybean oil next year would be far stronger than for soybean meal.

More info: USDA Oil crops outlook

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