Soybean Comments

The USDA increased the old crop soybean carryout this month due to weaker than expected export demand. Otherwise the old crop balance was unchanged. The new crop carryout was projected at 400 million bushels which we  judge as neither burdensome or tight. The USDA anticipates a major recovery in  soybean exports next season as the Chinese  appetite for soybeans grows. 

The South American old crop soybean production estimate was trimmed again this month which  will be felt in new crop demand for U.S. soybeans. The new crop S.A. crop was expected to exceed this year’s by a significant margin but that is too far ahead to interest traders at this point.

USDA increased old crop soybean oil exports reflecting strong sales this spring. Old crop soybean oil used as fuel will decline with a  sharp drop in crude oil based product prices.

The soybean meal old crop balance was virtually unchanged. New crop meal domestic usage will remain strong while meal exports slip a bit due to a larger new crop in Argentina. 

China’s demand for soybean meal is expected to increase as their swine herd expands.

Price probabilities at this time of year are tied to summer weather. Soybean market bulls can take some encouragement by the current balances that don’t show us buried in soybeans (as is the case with new crop corn) leaving the market more prone to rally if weather proves unfavorable.

Soybeans in Million Bushels