The latest round of USDA reports calls for higher soybean exports and lower soybean ending stocks, sparking a price rally. Mac Marshall, vice president of market intelligence for the United Soybean Board and the U.S. Soybean Export Council, says U.S. soybean supplies are tight and getting tighter.
“We saw the tremendous price respond and that really is owing to balance sheets which are already tight, getting even tighter. Every January USDA revises its production figures as it trues up the crop size and it took down the U.S. 2020 soybean crop size slightly by 35 million bushels. But that effectively led to an additional tightening of the balance sheets where we went from expected carry out of 175 million bushels to 140, that’s about a three percent stocks to use ratio the tightest we’ve had about seven or eight years.”
Marshall says robust exports of U.S. soybeans are a contributing factor as well.
“We’ve had this really aggressive export sales pace throughout the entire marketing year starting on September 1, and I was looking to see if USDA would actually issue an upward revision to their projection for U.S. soybean exports and they did bring it over 60 million metric tons for the first time since 2017. This is actually the latest in the marketing year that we’ve seen an estimate for exports to be this high.”
Marshall says right now, farmers are looking at price ratios to make final planting decisions.
“Farmers are going to be looking at what the price signal say for planting, but certainly right now with where we are around price ratios and price levels, there’s a strong signal for some additional soy plantings in 2021.”
Learn more on the Market Intelligence page at www.unitedsoybean.org.