Future prospects of soybean prices in the United States

Introduction: the U.S Department of agriculture currently forecasts an average farm soybean price of 400-480 US cents / bushel in 2001 / 02 market The forecast price is basically consistent with the average price of 1999 / 00 market year and 2000 / 01 market year, with the average price of 463 cents / bushel and 454 cents / bushel respectively In the first 15 weeks of the market year, the average spot soybean price in central Illinois ranged from $3.985/bushel (October 22) to $4.715/bushel (September 3), with an average price of $4.285/bushel The average price on December 14 was $4.27/bushel The average market price so far this year is 35 cents lower than the same period last year There are three main factors for the annual low soybean price in this market: the first is the record high soybean production in the United States, the second is the slow progress of export shipping up to the middle of October, and the last is the expectation that the soybean production in South America will hit another record in 2002 If soybean prices rise, one of these three factors needs to change The U.S Department of agriculture will release its final estimates of U.S soybean production on January 11, 2002 Although January's production estimate is likely to be lower than November's (in 13 of the past 20 years, January's estimate is lower than November's estimate), this year's final production estimate lower than November's estimate is still not enough to change the huge supply situation And it is possible to increase the U.S soybean production estimate in January's forecast In 11 of the past 20 years, the November estimate has exceeded the October estimate, as has been the case this year Six of these 11 years have January estimates that exceed November estimates On the other hand, the process of soybean export detection in the United States has been greatly improved since mid October From October 18 to December 13, the average weekly soybean export detection value of the United States is about 38 million bushels, compared with the average weekly soybean export value of the same period last year is about 29 million bushels And there are more unsold sales As of December 6, the total volume of unsettled sales was 311 million bushels, compared with 216 million bushels in the same period last year The U.S Department of agriculture forecasts that the U.S soybean exports will reach 1 billion bushels in this market year, with an estimated 70% of sales completed Shipping volume plus sales volume is nearly 20% higher than the same period last year, although it is expected that this year's shipping volume will be basically the same as last year's The increase in export sales over last year is mainly due to sales to Asian destinations as well as unknown (possibly China) USDA expects us soybean exports to increase by 20 million bushels to 1 billion bushels this year The faster export and sales of US soybean meal and soybean oil is also conducive to supporting domestic soybean crushing The U.S Department of agriculture now forecasts that the market will squeeze 1.67 billion bushels of soybeans this year, an increase of 29 million bushels or 1.76% over last year After the slow start of squeezing in September and October, the squeezing volume increased by about 3% in November Many analysts now believe that U.S soybean crush and export volumes will exceed USDA estimates In spite of this, the ending stock of soybean in the market is still the highest in three years, which is much higher than the beginning stock The most important part is that the early season climate in South America (especially in Brazil) is suitable for the cultivation of soybean crops and the growth of early crops The humid climate in Argentina has delayed the planting of corn, which may lead to the conversion of some corn planting areas to soybeans But recently there has been a drought in Argentina, which worries about potential damage to crops A sustained dry climate, especially if extended to southern Brazil, will have great potential to drive up soybean prices in the next two to three months The market has been affected by the highest record soybean production in South America Therefore, if there is a possibility of a large reduction in soybean production in South America and the consumption process is rapid, the futures price will fluctuate in the near future contract low, which may lead to a rapid reflection of the price The long-term analysis of soybean production prospects in the United States will be one of the most important factors affecting prices The first consideration is the planting area, which will be announced on March 28 The planting area of winter wheat will be announced on January 11, which may also be of reference significance for the analysis of soybean planting area in spring Soybean prices are likely to rebound moderately in the coming weeks The market will pay special attention to the climate in South America and soybean crops If the drought continues, the futures target price in March 2002 may reach 4.60 USD / bushel and 4.75 USD / bushel If the climate improves, prices will remain depressed.