Soybeans + Numbers
Those listening to the markets every day know there is a big difference between the number of acres the trade thinks will be planted to soybeans and the number of acres USDA is so far projecting. These aren’t as far apart as you might think and there may even be some positive wiggle room in them.
The trade has long thought U.S. farmers will plant about 86 million acres of soybeans. USDA thinks they’ll plant 83 and half million. Because USDA is using
a much bigger national average yield the total number of soybeans raised is only about 56 million bushels apart…both in the 3.8 billion bushel range. USDA thinks that means the cash price of soybeans paid to farmers next year will average about nine bucks. University of Illinois Ag Economist John Newton has a brighter outlook.
The trade has long thought U.S. farmers will plant about 86 million acres of soybeans. USDA thinks they’ll plant 83 and half million. Because USDA is using
a much bigger national average yield the total number of soybeans raised is only about 56 million bushels apart…both in the 3.8 billion bushel range. USDA thinks that means the cash price of soybeans paid to farmers next year will average about nine bucks. University of Illinois Ag Economist John Newton has a brighter outlook.
Quote Summary - The big picture supply and demand fundamentals for next year, with production increasing and supply building naturally points to lower prices. USDA has pegged the soybean marketing year average price at $9 per bushel. This is a dollar and twenty cents below this year’s projections under similar conditions. There is opportunity, then, for the price to come up from there.This opportunity lies in the soybean export market which is already on pace to set a record for this year and projected by USDA to be even better next year.
Quote Summary - So where is the potential for prices. Well, USDA has lower planted acreage of soybeans, but a pretty high yield. If yield is closer to U of I’s calculated trend of 44.3 bushels to the acre going back to 1960, then there would be a lower total production of soybeans with strong consumption. Stocks could be reduced, however highly unlikely, and we could see positive price pressure.Farmers will add their take on how many acres of soybeans will be planted in the Prospective Plantings report to be released March 31st. USDA is now surveying them.