US soybean acres may be set to rise again
Details of feed crop supplies, demand and potential US prices were part of the World Agriculture Supply and Demand Estimates report released Wednesday by the US Department of Agriculture (USDA).
In some US states, wet weather and flooded fields have led to delays and the need to replant acres, said Scott Stiles, extension economist for the University of Arkansas, system division of agriculture.
“In some areas of the state, producers were able to get back in the field Monday,” he told us. “But we’ve got [places] in the north east part of the state that are still wet and may be a few areas where they’ll struggle to get it in the field by the end of the month.”
About 181,000 acres of rice have already been lost to flooding and likely will shift to soybean production, he said. The change comes after producers in many states indicated they were considering a turn to additional acres of soybean production.
Prices for the feed crop have dropped in recent months, and most recent projection offers a $2 range, he said. “The price outlook is not as optimistic as it was,” he added.
“That seems like a fairly wide range to place price expectation, but it’s based on the sensitivity of the ending stocks to the yields we have this year,” said Stiles. “A one bushel change up or down can have a huge impact on ending stocks.”
The current USDA price range is $8.30 to $10.30 per bushel, compared to an average price of $9.55 a bushel last year, the USDA said. Soybean meal prices are expected to range from $295 to $335 per short ton, compared to $320 in 2016/17.
The price range is expected to narrow as harvest nears in several months, said Stiles.
In 2017/18 the US expects to see larger supplies along with increased crush, exports and ending stocks, said the USDA. The crop is expected to be down 52m bushels to 4.255bn bushels owing to reduced yield offsetting increased acres.
Supplies are predicted to increase 4% from last year to 4.715bn bushels, the department said. Domestic meal disappearance is expected to increase, and meal exports are set to be about 12.4m short tons – an overall reduction in the US’ share of the global trade market.
“There’s a steady amount of soybeans out of South America now so they’ll be a strong competitor until are harvest starts in the fall, but that’s pretty normal,” said Stiles. “Between April and May we start to see export sales taper off and remain slow until the last quarter of this year.”
Global production of oilseeds is expected to increase to 572.1m tons, the department said. But, soybean production is expected to drop by 3.4m tons as yields return to trend levels.
With the drop in corn planting in China, the country has raised its soybean production, said Stiles. But, that increase is not expected to account for the growth in demand.
Crush is predicted to increase and protein meal consumption is expected to grow by 4% in 2017/18, the department said. Soybean exports are forecast to grow to 149.6m tons, with import increases for China, Egypt, Vietnam and the EU.
Corn and wheat crop details
The corn crop is predicted to drop to 14.1bn bushels with reductions in area planted and yield, said the USDA. Per acre yield of 170.7 bushels is expected based on trend.
However, the drop in crop production is partly offset by large beginning stocks, the department said. Supplies remain the second highest on record.
Corn use is anticipated to drop, with a bump in domestic use balanced by a drop in exports, the department said. Season-average farm price is set at $3-$3.80 a bushel.
“U.S. corn exports are down 350m bushels, as a 1bn-bushel year-over-year increase in the combined corn exports of Brazil and Argentina during 2016/17 (local marketing years beginning in March 2017 and ending February 2018) is expected to cut into the 2017/18 US shipping season,” the department said. “With total supply falling faster than use, 2017/18 US ending stocks of corn are down 185m bushels.”
Global trends also look to reduced production, but with increased use and smaller ending stocks, the department said. Imports are expected to increase by 7m tons stemming from several countries including Vietnam, Egypt, the EU, Saudi Arabia Mexico and Iran, and would drop ending stocks.
Corn supply in China has dropped by 14m tons, the department said. Area planted has been lowered while demand is expected to increase with low domestic prices and a reduction of imported corn substitutes.
US wheat supplies for 2017/18 have been dropped by 9% based on a reduced production only partially offset by higher beginning stocks, said the USDA. Total wheat production is estimated to be about 1.8bn bushels, down about 500m bushels from the previous year.
Wheat yield is expected to be about 47.2 bushels an acre, down about 10% from last year, the department said. Winter wheat production also dropped sharply with a reduction in harvested area.
“Winter wheat benefited from diminishing drought conditions in the plains and Midwest,” said the USDA. “However, a late April snowstorm affected large portions of the hard red winter wheat belt, especially western Kansas.”
In the US, total use in 2017/18 is predicted to drop by 2% based on reductions in exports and feed and residual use, the department said. Exports are set to be down from the previous year, but ahead of the five-year average, and the EU is expected to regain share in the export market.
US ending stocks are predicted to decline by 245m bushels, said the USDA. Season-average farm price is set at $3.85 to $4.65 a bushel, with a midrange $0.35 above last year.
Global supplies are predicted to drop slightly as higher beginning stocks see an offsetting drop in production, the department said. Consumption is also expected to be down, with reduced wheat feeding.
Global imports are expected to be a record, and ending stocks are expected to be to be 2.58.3m tons, the department said.