Soybean and product prices are all forecast lower for 2023/2024. The 2023/2024 U.S. season-average soybean price is forecast at $12.10 per bushel, down compared with $14.20 per bushel in 2022/2023. (Photo: Iowa Soybean Association/Joclyn Bushman).
Report raises soy yields, deflates prices
May 18, 2023 | Kriss Nelson
Could soybean farmers be raising a record crop? The U.S. Department of Agriculture (USDA) thinks so.
USDA’s outlook board estimated a 4.51-billion-bushel soybean crop in its recent World Agricultural Supply and Demand Estimate (WASDE) report.
The 2023/2024 outlook for U.S. soybeans shows higher supplies, crush and ending stocks with expected lower exports than the 2022/2023 crop year.
The USDA forecasted a 5% increase for the soybean crop from last year’s crop, now estimated at 4.51 billion bushels. Lower beginning stocks offset increased production, resulting in a forecast of 4.74 billion bushels for soybean supplies, up 4% from 2022/2023.
What does a potential record soybean crop with lower exports mean for futures prices?
“I have stuck with the same tagline for 2023 – I like the first half of the year, I don’t like the second,” says Chad Hart, Iowa State University Extension economist. “As we sit five months in, I still feel that way. We have watched prices go down but are still at profitable levels. But look at new crop pricing; we are currently sitting at breakeven prices at best.”
The USDA projected the U.S. ending stocks for 2023/2024 at 335 million bushels, up 120 million bushels from the revised 2022/2023 forecast.
Soybean and product prices are all forecast lower for 2023/2024. The 2023/2024 U.S. season-average soybean price is forecast at $12.10 per bushel, down compared with $14.20 per bushel in 2022/2023.
Soybean meal prices are forecast at $365 per short ton, down $90. Soybean oil prices are forecast at 58 cents per pound, down 6 cents from 2022/2023.
Hart says the futures market and USDA’s projections are aligned.
“As USDA is looking forward, they are saying we continue to see these lower prices maintaining,” says Hart. “The projected $12.10 per bushel is down over $2 from the 2022 crop. That is a sizeable cut and is basically where the futures market is right now for new crop pricing.”
Short-term market factors
Planting progress and emergence are two things that could affect markets in the next few weeks.
“As we look at soybean planting running well ahead, the market will continue to see if that pace keeps up or slows down as we head into the latter part of May,” says Hart.
As of May 15, 69% of Iowa’s soybean crop was planted, over a week ahead of average. Nineteen percent of soybeans have emerged, nine days ahead of last year and five days ahead of normal, according to the Iowa Department of Ag and Land Stewardship’s Crop Progress report.
If progress slows, it could lead to slight pressure on pricing. Hart says that seasonal highs usually hit between Mother’s Day and Father’s Day.
“That timeframe is often linked to whispers of planting problems,” says Hart. “It could lead to a price bump. That is something the market hasn’t had this year because of the speed we have moved through the fields, but something to watch over the next couple of weeks.”
With other states north of Iowa having difficulties getting into the fields this spring, will that impact short-term market pricing?
“Right now, that answer is no,” says Hart.
The major soybean and corn-growing states of Iowa, Illinois, Indiana and Missouri have successfully planted crops.
“Those large states make up the yield losses for the fringes,” says Hart. “Unless those problems in North Dakota are substantial, it will not likely affect national totals. You’re probably not moving the price if you are not impacting national totals.”
The U.S. soybean crush for 2023/2024 is projected at 2.31 billion bushels, up 90 million from the 2022/2023 forecast on favorable crush margins and strong demand for soybean oil as a biofuel feedstock, which is projected to increase 900 million pounds to 12.5 billion pounds.
Domestic soybean meal disappearance is forecast to increase 2% from 2022/2023 on lower prices and modest growth, primarily in poultry production. The U.S. is expected to export 14.8 million short tons of soybean meal, maintaining its share of global trade slightly above the prior 5-year average.
U.S. soybean exports are forecast at 1.98 billion bushels, down 40 million from 2022/2023, with strong competition from increasing South American production and limited gains in global import demand.
Global oilseed outlook
The 2023/2024 global oilseed outlook shows higher production, crush, and ending stocks than the last marketing year.
Global oilseed production is expected to rise 43.8 million tons to 671.2 million tons due to higher soybean production in South America and the United States; higher sunflower seed production in the EU, and higher rapeseed production for the EU and Canada.
Combined oilseed production for major South American producers (Brazil, Argentina, Paraguay and Uruguay) is expected to grow by 31.9 million tons as producers bounce back after last year’s drought in southern South America.
Global 2023/2024 oilseed crush is growing 20.7 million tons to 542.5 million, with most of the growth in soybean crush for Argentina, China, Brazil and the United States.
Soybean products account for most of the oilseed meal and vegetable oil trade growth, counter to last marketing year when lower Argentine supplies depressed soybean product exports and were replaced by palm oil and sunflower seed and rapeseed products.
Global soybean demand
Global 2023/2024 soybean trade is growing 4 million tons to 172.4 million, reflecting increased demand by China and higher imports for Pakistan, Egypt, and Bangladesh after last marketing year’s declines.
China’s imports are rising 2 million tons to 100 million, a slower rate than the prior decade.
With projected weaker growth for China and EU soybean imports, coupled with record South American supplies, the U.S. share of global exports is expected to decline.
“We are going to see fewer exports as we are looking forward because U.S. soybean prices are higher compared to the rest of the world,” says Hart.
Hart noted South America has seen continued growth in soybean production.
Projections show that Brazil, Argentina, the United States and China will increase global 2023/2024 soybean ending stocks to 122.5 million tons by 21.5 million.
The ending stocks figure includes mid-season stocks (September 30, 2024) for Brazil and Argentina and reflects growing supplies leading into the 2024 U.S. export season.
June acreage report
Given the speed the soybean crop has been planted, will this mean more acres shifted to soybeans than indicated in the March prospective plantings report?
“Especially in areas where winter kill knocked out winter wheat, if they are looking for a spring crop to plant, if they have decent moisture prospects, we could see more soybeans getting planted,” says Hart. “The problem with adding more acres means more potential soybean bushels that could put a downward pressure on the markets – especially on new crop pricing.”