soybean situation &outlook

Soybean Situation &Outlook

Chuck DanehowerExtension Specialist – Farm Management

What Affects the Soybean Market?

• U.S. Dollar

77.27

9.19

What Affects the Soybean Market?

• U.S. Dollar

• Crude Oil

66.95

9.19

What Affects the Soybean Market?

• U.S. Dollar

• Crude Oil

• U.S. & World Economic Health– Slow Ag news days market follows Dow

9789

9.19

What Affects the Soybean Market?

• U.S. Dollar

• Crude Oil

• U.S. & World Economic Health– Slow Ag news days market follows Dow

• Index and Commodity Funds

What Affects the Soybean Market?

• U.S. Dollar

• Crude Oil

• U.S. & World Economic Health

• Index and Commodity Funds

• Weather– Argentina – worst drought in 50 years

What Affects the Soybean Market?

• U.S. Dollar

• Crude Oil

• U.S. & World Economic Health

• Index and Commodity Funds

• Weather– Argentina – worst drought in 50 years– How did wet Spring affect acres & yields?

• Farmers have said it was the worse planting season ever experienced.

What Affects the Soybean Market?

• U.S. Dollar

• Crude Oil

• U.S. & World Economic Health

• Index and Commodity Funds

• Weather– Argentina – worst drought in 50 years– How did wet Spring affect acres & yields?– Frost concerns have added support to prices

Percent Dropping LeavesSept. 27/5 Yr. Avg.

76%84%

40%56%

41%77%

81%84%

63%81%

76%83%

73%85%

86%90%

74%80%

58%69%

Nationwide 63% 77%

Freeze By Yield Loss R5 65% R6 37% R7 11% R8 0%

Soybeans for Beans, Area Harvested, Yield, Selected States, Forecasted September 1, 2009

State Acres(1,000) 2009 2008 5 yr. Avg.

AL 440 37.0 35.0 28.8

AR 3,350 38.0 38.0 36.4

GA 480 34.0 30.0 28.4

IL 9,050 44.0 47.0 47.0

IN 5,480 43.0 45.0 48.3

IA 9,730 52.0 46.0 50.0

KS 3,500 40.0 37.0 36.0

KY 1,430 42.0 34.0 38.5

LA 1,000 35.0 33.0 35.8

MI 1,990 38.0 37.0 39.9

MN 7,100 40.0 38.0 40.7

MS 2,170 41.0 40.0 36.1

MO 5,350 42.0 38.0 39.1

NE 4,650 51.0 46.5 48.4

NC 1,760 34.0 33.0 29.6

Soybeans for Beans, Area Harvested, Yield, Selected States, Forecasted September 1, 2009

State Acres(1,000) 2009 2008 5 yr. Avg.

ND 4,000 30.0 28.0 30.9

OH 4,580 47.0 36.0 44.4

SC 590 27.0 32.0 25.4

SD 4,300 39.0 34.0 35.8

TN 1,560 40.0 34.0 34.2

TX 210 25.0 24.0 28.7

VA 590 35.0 32.0 32.0

WI 1,630 39.0 35.0 39.6

US 76,767 42.3 39.6 41.9

U.S.Soybean Oil

09/10 P 08/09 E 07/08Million pounds

Beg. Stocks 3,100 2,485 3,085

Production 19,180 18,915 20,580

Imports 75 100 65

Supply, Total 22,355 21,500 23,730

Domestic 16,500 16,200 16,200

For methy ester 2,100 1,850 3,245

Exports 3,250 2,200 2,911

Use, total 19,750 18,400 21,246

Ending Stocks 2,605 3,100 2,485

Average Price (c/lb) 32.00 – 36.00 32.25 52.03

33.24

U.S.Soybean Meal

09/10 P 08/09 E 07/08Thousand short tons

Beg. Stocks 300 294 343

Production 40,235 39,456 42,284

Imports 165 100 141

Supply, Total 40,700 39,850 42,768

Domestic 30,800 30,750 33,232

Exports 9,600 8,800 9,242

Use, total 40,400 39,550 42,474

Ending Stocks 300 300 294

Average Price ($/s.t.) 280 330 335.94

288.50

Soybeans ---Supply/Demand ---

2008/09 2009/10

BearishUSDAExpected Bullish

Beginning Stocks(MB) 205 110 110 110

Acres (MA Planted) 75.7 77.7 77.7 77.7

Acres (MA Harvested) 74.6 76.8 76.8 76.3

Yield 39.6 43.3 42.3 41.3

Imports 15 10 10 10

Supply(M. Bu) 3179 3450 3366 3272

Use:

Crushing 1660 1660 1690 1690

Exports 1280 1250 1280 1280

Seed, Feed 129 170 175 175

Ending Stocks 110 370 220 127

Projected Price $10.00 $7.75 $9.10 $10.00

Stocks/Use 3.6% 12.0% 7.0% 4.0%

U.S. Soybean Ending Stocks and Price, 1993-2009

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

$11.00

0

100

200

300

400

500

600

700

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 F

Mill

ion

Bu

Ending Stocks Price/Bu

Foreign ProductionWASDE-474 September 11, 2009

ArgentinaBillion bushels

09/10 P 08/09 E 07/08

Beg. Stocks .560 .800 .830

Production 1.873 1.176 1.698

Exports .356 .219 .508

Total Domestic Use 1.721 1.475 1.837

Ending Stocks .731 .560 .800

Foreign Production WASDE-474 September 11, 2009

BrazilBillion bushels

09/10 P 08/09 E 07/08

Beg. Stocks .435 .694 .668

Production 2.278 2.094 2.241

Exports .898 1.078 .932

Total Domestic Use 2.171 2.356 2.219

Ending Stocks .547 .435 .694

Foreign Production WASDE-474 September 11, 2009

ChinaBillion bushels

09/10 P 08/09 E 07/08

Beg. Stocks .303 .156 .099

Production .551 .588 .514

Imports 1.415 1.462 1.390

Total Use (includes exports) 1.990 1.886 1.831

Ending Stocks .279 .303 .156

China has committed to buy 430 million bushels of U.S. soybeans. This is 62% of total imports from U.S. and 30% of total imports.

World Supply & Demand WASDE-474 September 11, 2009

Billion bushels

09/10 P 08/09 E 07/08

Beg. Stocks 1.478 1.944 2.311

Production 8.963 7.742 8.125

Imports 2.757 2.732 2.872

Total Domestic Use 8.511 8.136 8.442

Exports 2.831 2.804 2.921

Ending Stocks 1.857 1.478 1.944

9.1925

Summary & Observations• Outside influences are affecting the market.

• Crop is later than normal, yields uncertain.

• Next USDA S & D Report – October 8, 2009– Will there be an acreage surprise?

• Strong Chinese demand, will it continue?

• Acreage estimates for 2010

• Soybean/corn ratio

• Weekly Comments– http://economics.ag.utk.edu/cropcomm.html

• http://economics.ag.utk.edu/careers.html