Planting was stretched out, and so will harvest be quite elongated, but the US soybean crop is still expected to be a record in size, and will supply a large demand base. Using a trend line yield, the 77.5 million acres of soybeans should produce 3.26 billion bushels, and subsequently lower the price forecast for the new crop. The larger US crop will also bolster world production, pushing global ending stocks for the old crop that was at a five year low to comfortable levels. So if you are tweaking your marketing plan for soybeans, there are some significant factors that need to be addressed.

If you have soybeans to sell in the 2009-2010 marketing year, you won’t be alone. Using the National Agricultural Statistics Service numbers, USDA economists report the US is growing its largest soybean crop and there is more acreage in the major soybean producing states this year compared to last year, except IA and NE, where corn acreage grew substantially. KS and ND have record high soybean acreage. The challenge will be in the maturity of the crop because of late planting in many states, which has delayed blooming and pod fill to days with lesser daylight. Currently, two-thirds of the acreage is good to excellent with good soil moisture reserves.

Of the soybeans to be produced this year, nearly one-third, 1.275 billion bushels, will be exported, and slightly more, 1.68 billion will be crushed. At the end of the current marketing year next month, the old crop will have a 110 million bushel carryover that will be available for use in the next marketing year until the new crop is available. The market’s comfort with the supply has been a reason for the $2.50 decline in value of cash beans, and a reason for USDA cutting its range for the season average price to $8.30 to $10.30 per bushel. Fall cash bids are currently in the lower quarter of that range.

While global demand is high, domestic demand is sluggish. It is the same for soybean oil, as prices continue to erode. Although biodiesel has been a mainstay of the soybean oil market, biodiesel exports are only 10% of what they were a year ago. The change resulted from the EU decision to place a countervailing duty on biodiesel imports from the US. That meant soybean oil was in lesser demand to make biodiesel, and the current rate is only half of what it was a year ago. The outlook for the new marketing year is much the same, but there is expected to be a robust export market for soybean oil until South American crops come into play. The USDA economists believe Brazilian and Argentine soybean oil will be used primarily in their domestic markets, leaving a larger global demand to be filled by US soybean oil.

Soybean exports of the old crop continue at a record pace, and the Economics Research Service says shipments are not letting up after setting all times highs the past several months. Old crop soybean exports should reach a record of 1.26 billion bushels. The export demand has left stocks rather tight, and helped old crop prices climb to highs in mid-June, but moderate once the market was comfortable with available stocks.

With the higher acreage for the new soybean crop, acreage correspondingly declined for minor oilseeds, including canola, flaxseed, peanuts, safflower, and sunflower. Crop progress has been slow for them, as well, in part by a wet spring and cool weather where many are produced in the Red River Valley. Yield potential is expected to be limited.

In the global market, stocks are at a five year low, drawn down by exports recorded by the US, Brazil, and Argentina. However the new crop in the US is expected to replenish global stocks. Soybean imports globally are down around the world, except for China which has a surprisingly strong demand for soybeans, and many are being stockpiled.

Summary:
The US soybean market has been driven by a strong export business in recent months, with China being the primary buyer for its purpose of stockpiling. As a result, global soybean stocks are down in the US, Brazil, and Argentina, but the new crop in the US will raise the available supply beginning with the US harvest. When the South American harvest begins, beans and meal should come on to the market, but Brazil and Argentina are using increasing amounts of their own soybean oil. The US has a large supply of surplus soybean oil, in part because of lesser volumes being converted to biodiesel because of European trade policies that cut US exports of biodiesel by 90%. Soybeans will be the major player in the overall oilseeds market this year because of reduced acreage and poor crop development for minor oilseeds.