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USDA slashes soybean production and exports

Article cover photo
The latest U.S. Department of Agriculture World Agricultural Supply and Demand Estimates report indicated there was a drop in production and exports. Officials believe that the large carryouts will spell trouble for commodity prices if a resolution can’t be reached dealing with tariffs. (Photo: Joseph L. Murphy/Iowa Soybean Association)

By Matthew Wilde, ISA senior writer


Big soybean crops don’t always get bigger, but supplies can. That oddity, according to Iowa Soybean Association (ISA) leaders and analysts, clearly shows the effect of the U.S.-China trade war.

National soybean production is pegged at a record 4.6 billion bushels, down 90 million from last month, according to the U.S. Department of Agriculture (USDA) Crop Production Report released Thursday. The average soybean yield nationwide is projected at 52.1 bushels per acre, down 1 bushel mainly due to reductions in Iowa and Illinois, the report said.

Wet conditions the past two months hurt Iowa’s once promising crop. The state’s average soybean yield was reduced by 3 bushels from last month to 58 bushels per acre, the report said. Accordingly, production plummeted by nearly 30 million bushels to 576.5 million.

Typically, prices shoot up when production is cut. Instead, November soybeans on the Chicago Board of Trade held steady Thursday closing at $8.67 per bushel.

Nate Burk reacts to WASDE report.
Nate Burk reacts to WASDE report.

“This is a reminder there are long-term consequences to the trade war,” said Kirk Leeds, ISA CEO. “The soybean industry has a lot of work to do and opportunities exist. But the market place is not the same as it was six months ago, and it may never be the same again.”

China levied an extra 25-percent tariff on U.S. soybeans, among other goods, in July in retaliation for U.S. duties on Chinese goods geared to stop unfair trade practices. As a result, U.S. soy exports to the world’s largest buyer — which exceeded 1 billion bushels last year — are down 94 percent for the 2018-19 marketing year, according to the latest government export data. Overall, U.S. soybean exports are down 30 percent.

Thursday’s USDA World Agricultural Supply and Demand Estimates (WASDE) Report reduced U.S. soybean exports by 160 million bushels to 1.9 billion for the current marketing year. The government increased 2018-19 ending stocks by 70 million bushels to a whopping 955 million bushels.

Lower production and strong domestic demand — domestic crush was increased by 10 million bushels to 2.08 billion — couldn’t make up for lost exports to China, the WASDE Report said. President Donald Trump and Chinese President Xi Jinping are scheduled to meet later this month at the G20 Summit in Argentina to discuss trade issues between the countries, and Trump recently said he believes a deal can get done.

“There’s a glimmer of hope that will happen,” said ISA President Lindsay Greiner. “But I’ve been saying for months that farmers are running short on patience.”

Soybean prices have dropped about $2 per bushel since March, primarily due to the trade war. The season-average soybean price range is forecast at $7.60 to $9.60 per bushel, unchanged at the midpoint, according the WASDE Report.

Risk Management Consultant Nate Burk with INTL FCStone Financial said given market fundamentals and the ongoing trade war, farmers may want to layer in sales if prices near $9 per bushel again versus the January contract.

“We’re staring down a potential carryout of nearly 1 billion bushels,” Burk said. “Psychologically, that can be a big blow. Farmers will need to focus on supply and demand, record planting pace in Brazil and trade talks with China.”

The U.S. soybean industry has plans to move the mega crop, starting with a buyer’s conference in Barcelona, Spain later this month.

Greiner will attend the event hosted by the U.S. Soybean Export Council. The goal is to increase U.S. soybean sales and market share in Europe, the Middle East and North Africa. Strong U.S. sales to markets other than China are expected to continue, according to the WASDE Report.

“My message is we’re sitting on a record crop that’s priced to sell,” Greiner said. “I’m hoping to hear that they need it. I would be disappointed if I don’t.”

Contact Mattew Wilde at

For media inquiries, permission to republish articles or to request high-res photos, please contact Katie James, ISA Public Relations Manager at © 2020 Iowa Soybean Association. All rights reserved.

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