Soybean Meal Economic Value Study – 11/10/2022
This month USDA estimated the US soybean carryout for the 2022/2023 crop year at 220 million bushels or 5% of crop year usage (excluding residual). We have scattered the December/March high for March soybean meal as a function of the US soybean carryout to usage ratio as forecast by USDA in the spring. Current soybean meal futures are trading on the high side of the projected range of $350 to $400.
The outcome of the 2022/2023 Southern hemisphere soybean season will be the dominant force in the soybean market over the next three months. The current state of the Enso ( La Nina) cycle raises the risk, but by no means ensures, drought damage in either Argentina or Brazil. The possibility of a repeat of last year’s drought presents a major risk to soybean meal market bears.
A strong soybean oil market weighs on soybean meal as protein meal needs shoulder a smaller burden of the oilseed crush margin. A major break in edible oil prices would be a bullish force in the soybean meal market.
| US Soybean Supply/Usage Million Acres/Bushels | |||
| 2020/21 | 2021/22 | 2022/23 | |
| Area Planted | 83.4 | 87.2 | 87.5 |
| Area Harvested | 82.6 | 86.3 | 86.6 |
| Filler | |||
| Yield per Harvested Acre | 51.0 | 51.7 | 50.2 |
| Beginning Stocks | 525 | 257 | 274 |
| Production | 4,216 | 4465 | 4,346 |
| Imports | 20 | 16 | 15 |
| Supply, Total | 4,761 | 4738 | 4,634 |
| Crushings | 2,141 | 2204 | 2,245 |
| Exports | 2,265 | 2158 | 2,045 |
| Seed | 101 | 102 | 102 |
| Residual | -3 | 2 | 22 |
| Use, Total | 4,505 | 4465 | 4,414 |
| Ending Stocks | 256 | 274 | 220 |
| Carry/Usage | 5.7% | 6.1% | 5.0% |
| Nov. 2022 USDA Data | |||
Points for 2023 are based on USDA’s November data and the March soybean meal close on 11/10/2022.