Soybean Prices Focus on Trade and Weather
May 21, 2018

Todd Hubbs

Department of Agricultural and Consumer Economics
University of Illinois

farmdoc daily (8):92


Recommended citation format: Hubbs, T. "Soybean Prices Focus on Trade and Weather." farmdoc daily (8):92, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 21, 2018.

Permalink: http://farmdocdaily.illinois.edu/2018/05/soybean-prices-focus-trade-weather.html


Listen to MP3 Podcast

 

 

 

 

Soybean prices moved lower last week despite the positive outlook in the USDA's May WASDE report. The report, released on May 9, projected that stocks of U.S. soybeans at the end of the current marketing year would total 530 million bushels, slightly less than generally expected. The recent choppy price pattern reflects uncertainty in trade negotiations, the large Brazilian soybean crop, and weakening South American currencies.

November soybean futures prices moved in a band between $10.20 and $10.50 after the release of the surprisingly low March Prospective Planting report placed soybean acreage at 89 million acres. Prices broke lower on May 7 and continued to show weakness through May 18. The July - November price spread moved into negative territory on May 7 and reflects near-term uncertainty regarding trade prospects and planting issues. An additional level of uncertainty is the recent strengthening of the U.S. dollar to the Brazilian real which saw Brazilian export prices move on par with U.S. Gulf export prices. Brazilian production estimates of 4.3 billion bushels are equal to last year's record crop with some reports indicating the potential for even higher levels. The rapid drop in the Brazilian real last week brought increased sales by Brazilian farmers. Weekly exports of U.S. soybeans face increased competition from Brazil.

Currently, soybean exports are ahead of the pace needed to meet the projection of 2.065 billion bushels for the 2017-18 marketing year. As of May 17, soybean export inspections total 1.677 billion bushels. Cumulative Census Bureau export estimates from September 2017 through March 2018 exceeded weekly export inspections by 42 million bushels. If the same margin exhibited at the end of March continued through this period, exports through May 17 equaled 1.719 billion bushels. With 15 weeks remaining in the marketing year, 23.7 million bushels per week are necessary to meet the USDA projection. Over the last six weeks, soybean export inspections averaged 22.9 million bushels per week but varied with a low of 16.4 million bushels on for the week ending April 12 and a high of 32.8 million bushels for the week ending May 17. As of May 10, 397 million bushels of soybean had been sold for export but not shipped. This number exceeds the 346 million bushels necessary to reach 2.065 billion bushels based off of current sales figures and estimated export levels through May 17. A note of caution is warranted in the sales figures as China currently sits on 75 million bushels of unshipped sales and a 35 million bushel sales cancellation occurred on May 18. Recent developments in trade negotiations place a positive outlook for the remainder of the marketing year, but the uncertainty is not alleviated.

Soybean crush continues to provide support for soybean prices this year. April crush estimates by NOPA came in at 161.06 million bushels. Census Bureau estimates of crush during this marketing year run approximately six percent above NOPA estimates. If this pace continued, the Census Bureau crush estimate for the marketing year equals 1.365 billion bushels through April, 5.8 percent above last year's total over the same period. The current estimate implies that the crush during the remaining four months of the year must total 625 million bushels, 2.1 percent higher than the crush of a year ago, to reach the USDA projection of 1.99 billion bushels. Soybean meal exports continue to be strong due to issues in Argentina, the world's leading meal and oil exporter. Argentine production estimates sit at 1.43 billion bushels for the 2018 crop year, down 691 million bushels from last year's production. Issues associated with soybean crushing in Argentina continue to crop up with a possible worker's strike, port issues, and a weakening currency all looking to impact their potential for soybean crush over the next few months. Soybean crush shows no signs of weakening this summer in the U.S.

Early concerns about the 2018 soybean crop due to a slow start to the planting season have mostly dissipated. Concerns were mainly alleviated by the USDA's weekly Crop Progress report that indicated that planting progress in the 18 major soybean producing states came in at above average pace on May 13 with particularly strong performance in the eastern Corn Belt. Still, there should be some concern about crop progress, acreage allocations, and yield prospects in northern growing areas where planting progress sat well behind the average pace as of May 13. The USDA's Acreage report to be released on June 29 will also reveal any acreage changes from intentions published in the March survey.

Weather and trade issues will dominate price movements in the soybean market over the next few months. A resolution to the trade dispute with China would provide support for both new and old crop soybean prices, but uncertainty remains. Planting progress, crop conditions, and weekly export levels remain important variables to monitor as we move into the summer.

 

Video: Soybean Prices Focus on Trade and Weather


Discussion of soybean prices moving through the summer. Focus on November futures and July-November spread.

 
Click here to see more...

Soybean Prices Focus on Trade and Weather

Soybean Prices Focus on Trade and Weather

Discussion of soybean prices moving through the summer. Focus on November futures and July-November spread.... More
Spring seeding in Manitoba

Spring seeding in Manitoba

This videographer captured aerial shots of a Manitoba farmer air seeding. The tune is catchy, too!... More
Picture Butte Food Grains 2018

Picture Butte Food Grains 2018

Check out this video of the Picture Butte Growing Project. Volunteers just finished up seeding. ... More
Portable Straw Boiler System

Portable Straw Boiler System

Ron Horvath from Leross, Sask. uses straw bales to heat two houses and dry grain. He built a portable round bale furnace to reduce energy costs.... More
Seedling Diseases - Tamra Jackson-Ziems

Seedling Diseases - Tamra Jackson-Ziems

Seedling Diseases – Tamra Jackson-Ziems, Nebraska Extension plant pathologist, discusses how seedling diseases have been reported in Kansas. She also reminds Nebraska crop producers and consultants to always check their fields for these diseases.... More
Soilborne Pathogens - Tony Adesemoye

Soilborne Pathogens - Tony Adesemoye

Soilborne Pathogens – Tony Adesemoye, Nebraska Extension plant pathologist, shares information on soilborne pathogens which favor cool and wet weather conditions around the planting season.... More
Farm Bill Fails in US House

Farm Bill Fails in US House

Farm Bill Fails in House.... More

IPTV M2M, Market Analyst Elaine Kub and Walt Hackney

IPTV M2M, Market Analyst Elaine Kub and Walt Hackney

The 2018 Farm Bill battles its way through the U.S. House. Aerial applicators - "living the life" just a few feet above the heartland. Market analysis with Elaine Kub and Walt Hackney.... More
Noggins Corner Farm

Noggins Corner Farm

A multi generational family farm set in the fertile heart of Nova Scotia’s Annapolis Valley. Noggins Corner Farm combines the latest agricultural technology with the farming instincts of a family who is deeply rooted in the land.... More
Ranchin

Ranchin' In My Van

Ranchin' In My Van - Camila Cabello "Havana" Parody.... More
 Time To Gain, Let

Time To Gain, Let's Haul Some Grain - Welker Farms Inc

This is a part of farming that not many realize takes place. Farmers are known for planting, cultivating, and harvesting but the process of delivering the years crop is overlooked.... More
Van den Berg Farms Seeding 2018

Van den Berg Farms Seeding 2018

Van den Berg farms out of alameda Saskatchewan.... More
How the Beef Improvement Federation Helps the Beef Industry

How the Beef Improvement Federation Helps the Beef Industry

We talk with Lee Leachman, Colorado cattle producer and Beef Improvement Federation Vice President, to get his thoughts on the value of the Federation to the beef industry and how you can get involved with this important organization.... More
Plant Tissue Analysis

Plant Tissue Analysis

The Hefty brothers discuss the importance of doing regular plant tissue analysis during the growing season.... More
Iron Talk - Leaving Product In Spray Tanks

Iron Talk - Leaving Product In Spray Tanks

Darren Hefty talks about what you can do to avoid issues if you have to leave product in spray tanks for an extended period of time.... More
Ag Minute - Do Plant Roots Know Where To Grow?

Ag Minute - Do Plant Roots Know Where To Grow?

In this Ag Minute, Darren Hefty talks about plant root growth and finding nutrients in the soil.... More
Canadian Dairy XPO 2018

Canadian Dairy XPO 2018

Check out what the industry and producers have to say about CDX 2018!... More
Iron Talk - Leaving Product In Spray Tanks

Iron Talk - Leaving Product In Spray Tanks

Darren Hefty talks about what you can do to avoid issues if you have to leave product in spray tanks for an extended period of time.... More
Darci Lang teaches AWC attendees to focus on the positive

Darci Lang teaches AWC attendees to focus on the positive

AWC Speaker Darci Lang helped attendees at our March 2018 conference in Calgary shift their perspective to focus on the 90% of the positives in their lives. She shared touching personal stories and wonderful tips to help us move forward with joy.... More
Learn About: Antibiotics

Learn About: Antibiotics

Alberta Farm Animal Care talks about antibiotic use in livestock. All farmed animals are antibiotic free when they reach your plate.... More
1    2    3    4    5