Forecasts

Market Analysis  

The discovery and ramping up of vaccinations in the world’s coronavirus crisis and the return of China to the US/World oilseed markets has dramatically change the US soybean price outlook from just one year ago. The significant change in US supplies from record levels of 2 years ago to the current 7 years lows will prompt the trade’s attentions to the upcoming spring quarterly stocks reports being issued on March 31. The first US planting intentions will also be issued the same day. These numbers will be highly important to the major US agricultural crops, but the stocks numbers will provide significant mileposts on this year’s demand levels and last year’s crop sizes.  

China’s sizable return to the world protein market has pushed US sales to record levels. Beijing’s desire to rebuild their hog herd after AFS devastated their pork production has advanced US first-half soybeans shipments to their highest level ever. After a 1.097 billion bu. of fall exports, this past winter’s US shipments of 877 million were also the largest for the 2^nd quarter. This advanced total US exports  to 1.974 billion bu by March 1. Weather’s impact on S AM’s quality and size of their crops will determine if US exports are raised from the current 2.25 billion bu.  

The US soybean crushing pace had pushed 19 million bu. ahead of its 5 yr seasonal rate in the first 5 months of the crop year to hit the USDA’s 2.2 billion forecast. However, February’s extreme cold & snowy conditions in the central US dropped the National Processor (NOPA) output to 155.2 million bu., 12 million below expectations. This cut in output will likely put this winter’s domestic crush pace at 554 million bu. This remains a record 2nd quarter level, but our yearly rate is now only 7 million ahead of its needed pace.  

 Overall, the US March 1 soybean stocks will be near 1.455 billion bu., the lowest in five years. Last fall’s 74 mil lion bu. residual seems low given the record level of beans  in transit the first 6 months of the year. With seed beans  also moving into processing this winter, this quarter’s resid ual demand could expand by 50 million bu. vs declining.

What’s Ahead: The USDA’s March 1 soybean stocks will be the first check if 2020’s crop size is on target.  This quarter’s residual & June’s quarterly stocks will determine if a change is needed. 2021’s planting inten tions will get plenty of attention on March 31, but the perceived size of 2020’s crop & soybeans’ demand rate  remain important. Hold old-crop sales at 90-95% & have 20-25% of your 2021 output priced at this time.