December Soybean Meal Price Forecast – 07/20/2023

December soybean meal could have significant upside potential based USDA’s current USDA new crop soybean supply/usage balance and July livestock projections The harvest price forecasts for December soybean meal,  based on  the US soybean carryout to usage ratio and the livestock price index (LPI). The US soybean S/D & livestock price assumptions are displayed in the accompanying table and chart. We have plotted the forecast range of $385 to $40 range on the price chart.

Other factors to consider include soybean oil values and the 2023/2024 South American soybean outlook. Soybean oil has staged a major price rally this summer. Increased soybean oil values are negative for soybean meal prices  as oil assumes a larger share of the crush margin.  Currently the USDA assumes a major increase in Brazilian soybean production again in the 2023/2024 austral crop year due to larger soybean planted area and a favorable yield outlook.   

Summary:

• USDA soybean supply/usage balance: The USDA’s soybean supply/usage balance is a key factor that will affect soybean meal prices. If the USDA reduces its forecast for soybean carryout, it will likely lead to higher soybean meal prices.
• Livestock price index (LPI): The LPI is a measure of the demand for soybean meal by the livestock sector. If the LPI increases, it will likely lead to higher soybean meal prices.
• Soybean oil values: Soybean oil prices are negatively correlated with soybean meal prices. If soybean oil prices increase, it will likely lead to lower soybean meal prices.
• South American soybean outlook: The soybean outlook for South America is another important factor that will affect soybean meal prices. If South American soybean production is higher than expected, it will likely lead to lower soybean meal prices.

Based on historical price range & forecasts for 2023.