Expected Large Stocks Weigh on New Crop Soybean Futures Prices
USDA made only modest changes in the US soybean supply/usage forecasts this month’s WASDE report. The old crop US soybean crush estimate was reduced by 10 million bushels which carried through to a 10 million bushel increase in old crop and new crop carryout stocks. USDA expects an increase in new crop US soybean meal exports which will support a major increase in the new crop soybean crush.
| Soybean S/D Million Acres / Bushels | ||||
| 2021/2022 | 2022/2023 | 2023/2024 | 2024/2025 | |
| Area Planted | 87.2 | 87.5 | 83.6 | 86.5 |
| Harvested | 86.3 | 86.2 | 82.4 | 85.6 |
| Yield /Acre | 51.7 | 49.6 | 50.6 | 52.0 |
| Carry in Stock | 257 | 274 | 264 | 350 |
| Production | 4,464 | 4,270 | 4,165 | 4,450 |
| Imports | 16 | 25 | 25 | 15 |
| Supply, Total | 4,737 | 4,569 | 4,454 | 4,815 |
| Crushings | 2,204 | 2,212 | 2,290 | 2,425 |
| Exports | 2,152 | 1,992 | 1,700 | 1,825 |
| Seed | 102 | 97 | 77 | 78 |
| Residual | 5 | 4 | 37 | 32 |
| Use, Total | 4,463 | 4,305 | 4,104 | 4,360 |
| Ending Stocks | 274 | 264 | 350 | 455 |
| % Use | 6.1% | 6.1% | 8.6% | 10.5% |
| Avg. Farm Price ($/Bu.) | $13.30 | $14.20 | $12.55 | $11.20 |
| USDA June, 2024 Data | ||||
The 2024 US soybean crop is off to a better than average start, but the early June soybean crop condition index is only weakly associated with the final soybean production estimate. Corn Belt and Delta weather from mid June through mid August will make or break the US 2024 soybean crop.
USDA cut the Brazilian 2024 (harvest of which is just finishing up) soybean production estimate again this month. Brazil’s 2024 crop is still much larger than the expected US 2024 crop, but disappointing compared with estimates made in the austral spring considering the growing season was under the influence of the El Nino phase of the Southern Pacific Oscillation index. In the past El Nino has been associated with favorable growing conditions in the Brazilian soybean belt. USDA’s projection for the 2025 South American soybean crops are based on trend as the planting season is still four months away.
We have included two scatter charts with the high/low harvest time price range for November soybeans as a function of the US soybean carryout as a % of crop year usage. The points for 2024 are based on USDA”s June supply/demand forecast and the close for the 2024 November contract on June 14, 2024. The price /carryout stocks function is sensitive to changes in production assumptions. Cutting the 2024 soybean crop assumption by just 6% would push the study into years associated with a harvest high of $15 rather than the $11 to $12 harvest time November contract high suggested by USDA’s June 2024 forecast.