URBANA, Ill. — Soybean prices rallied over the last two weeks on planting issues across large swaths of the Corn Belt.
Based on current consumption pace, soybean use this marketing year looks to end up at or below the USDA’s projection of 4.004 billion bushels, according to University of Illinois agricultural economist Todd Hubbs.
“Given that two to three weeks remain until prevented planting dates on soybeans occur over most of the Corn Belt, the possibility of planting more soybean acres than needed under a weaker demand scenario looks inevitable,” Hubbs says in an Extension news release.
“As we enter the final quarter of the 2018-19 marketing year, the pace of consumption appears to be at or below the current USDA projection.”
Soybean crush remains on pace to hit the USDA forecast of 2.1 billion bushels. The forecast is 2.2% larger than the crush totals during the previous marketing year. Estimates for soybean crush during the first eight months of the current year exceeded that of last year by 3.4%.
The year-over-year changes in crush slowed during the third quarter of the marketing year.
The USDA projects U.S. soybean exports during the current marketing year at 1.775 billion bushels, 16.6% less than last year. With about 13.3 weeks remaining in the marketing year, soybean exports sit near 1.316 billion bushels.
Unshipped export sales as of May 23 were reported at 434 million bushels. Some of those sales will be rolled into the next marketing year or canceled altogether.
“Continued deterioration in trade negotiations with China led to reports of no buying of U.S. soybeans moving forward. However, no indication of withdrawing the 257 million bushels of outstanding sales currently on the books has been forthcoming,” Hubbs says. “A resumption of trade hostility with Mexico does not help the export situation considering Mexico is the second largest soybean export market this marketing year.”
Planting concerns hang over the 2019 soybean production season. Planting has proceeded at a pace that sits well behind the previous five-year average.
“Due to issues with corn planting and uncertainty about Market Facilitation Payments, an expectation of soybean acreage exceeding the intentions reported in the USDA’s March Prospective Plantings report seems prudent,” Hubbs says. “This acreage scenario is in stark contrast with the situation associated with corn acreage. Corn acreage appears set for substantial prevented planting or acreage switching as wet weather stretches into June.
“Acreage switching into soybeans will not be on an acre-for-acre basis from other crops not planted, but the potential for adding more than 3 million acres is high. Additional soybean acreage is not needed under current consumption expectations and brings the strength of the recent soybean price rally into question,” he adds.
Soybean acreage left to plant in the 18 states reported by NASS in the weekly Crop Progress report sat at 57.8 million acres as of May 26.
In particular, major soybean-producing states contain substantial acreage left to plant with Illinois (9 million acres), Iowa (6.4 million acres) and Indiana (5 million acres) all receiving rain from the recent weather pattern.
Weather forecasts indicate a return to normal levels of precipitation over the next few weeks, which may get soybean acres planted promptly over many areas. While the potential for prevented planting acres exists for soybeans, the prevent plant date still has 10-20 days remaining over most of the Corn Belt.
“For the U.S., quantifiable yield loss occurs as the percentage of the crop planted after May 30 increases. The prospect of yield losses eclipsing the potential impact of acreage increases remains to be determined from planting progress and summer weather,” Hubbs says.