May WASDE Reflects Increased Soy Crush Capacity
The latest World Agricultural Supply and Demand Estimates report from USDA offers a fresh look at the new growing season. Mac Marshall, United Soybean Board vice president of market intelligence, says the May WASDE offers the first look at the new crop balance sheets.
“Now, we know the supply side is pretty much baked in because we got the Prospective Plantings report at the end of March and shows we are going to have 87 1/2 million acres of soybeans. We know our standard abandonment rates. We know trend yield is 52 bushels per acre. We wind up with 4 1/2 billion bushels, so, you know, that’s not too surprising on the supply side. What I was looking for was really going to see what the breakdown is in how USDA is assessing the demand side.”
With more soy crush coming online and seeing the first waves of crush expansion this marketing year, Marshall says the report reflects that.
“So, we saw that crush figure come up about 90 million bushels, exports taken down a little bit, and some building inventories particularly on that expected large crop, that all contributing to a much lower marketing year average price of $12.10, about $2 lower than what was seen this last marketing year. As we have more of that crush, we’ve naturally gotten more oil and meal production.”
With the increased crush for soybean meal, USDA shows the per ton price for soybean meal declining from $455 per ton to $365, providing future demand opportunities.
“This is really something I think that bears monitoring, not just now but in the coming years, as the U.S. produces more meal and it gets cheaper for U.S. origin. I think it’s a great opportunity for our domestic animal ag producers. Certainly any time you can see cost mitigation in this time of inflation, particularly on input costs, relief is very welcome, as it’s welcome to our customers around the world.”
Keep up with the latest news from the United Soybean Board at unitedsoybean.org and Wednesday mornings at 10 a.m. Eastern on RFD-TV.