In its October World Agricultural Supply and Demand Estimates Report, the USDA indicated a reduction in soybean yields, partly offset by a gain in grain stocks. Mac Marshall, Vice President of Market Intelligence with the United Soybean Board, analyzes the soybean numbers.
“At this time of year, everybody is looking to right size what the total crop looks like. And as we’ve seen deteriorating conditions over the last couple of weeks and concerns about cold weather throughout the Midwest that are likely to unfold over the weekend, we did see a reduction in yields take you down to 49.8 bushels to the acre. That means a net loss of total production of 65 million bushels. I think it’s worth noting that, at the end of September, when we had the stocks report, that was a net gain of 34 million bushels heading into this marketing year. So, even as we’ve had the production cut, it’s somewhat counterbalanced, at least halfway, by that incremental supply that we have in storage at the start of the marketing year.”
Marshall noted a reduction in soy exports and an increase in crush.
“Balancing it all out, we saw a reduction of 40 million bushels in exports, an uptick in crush, not too surprising considering the pace of crush expansion that’s going to be unfolding in the coming years here in the U.S., and that export figure coming down. I don’t think too surprising either given the issues with the Mississippi River and getting off to a slow start this season from that low draft level.”
He says the market will be closely monitoring South American soybean production.
“We’re headed into a weather market again, and the weather market, of course, is going to be concentrated in South America. That was a big change on the international balance sheets, where USDA took up its forecast for Brazilian production from 149 million metric tons to 152. million metric tons. For comparison, the U.S. produced at 118 million tons this year. So, with that the market is, of course, going to be watching what unfolds in South America as it enters a potential third consecutive year of La Niña, but planting is off to a good start down there. I think, as of last week, that ten percent of the new crop beans were in the ground, and weather seems to be favorable so far. But of course, it’s still very early in that season. And as we look out over the next couple of months, as farmers are making their crop plans for planting in 2023, it’s going to be a pretty dynamic environment because global supplies and domestic supplies remain tight.”
Keep up with the latest news from the United Soybean Board at unitedsoybean.org and Wednesday mornings at 10 a.m. Eastern / 9 a.m. Central on RFD-TV.