U.S. soybean price outlook

Introduction: 1 Summary: the U.S Department of agriculture's January 11 estimate of the final soybean production in 2001 provided support for soybean prices The final US soybean production in 2001 is estimated to be 2891 million bushels, 32 million bushels lower than the November estimate The expected squeezing and export volume is higher than the estimated value in December and the expected inventory volume at the end of the year is lower than the estimated value in December, which is also conducive to price stability Drought in Argentina and southern Brazil, as well as concerns about production, also provide fundamental support for soybean prices The overall supply is adequate and it is expected that the soybean planting area in the United States will remain at a low price in 2002 The average spot price of soybeans in central Illinois has changed from $3.985/bushel (October 22) to $4.715/bushel (September 3) in 2001 / 02 The high price before the 2001 harvest did disappear The highest post harvest price is $4.40 per bushel (January 16) If there is no extreme climate problem, the price may remain lower than the current CCC loan rate Price volatility will increase in the next few weeks, as the climate in South America and the United States is very important for soybean supply prospects 2 The highest recorded supply and consumption: on January 11, the U.S Department of agriculture estimated that the final soybean production in 2001 was 2891 million bushels, 32 million bushels lower than the estimate in November, but 133 million bushels higher than that in 2000 It is reported that the average yield of soybean in the United States is 39.6 bushels / acre, 0.2 bushels higher than that in November, 1.5 bushels higher than that in 2000, and 1.8 bushels lower than the highest record yield in 1994 It is estimated that the decline in production is mainly due to the sharp decline in soybean planting area in the United States in 2001 It is estimated that the total soybean planting area is 74.105 million acres, which is 1311000 acres lower than the reported value in June 2001 and 255200 acres lower than the reported area in March 2001 The planting area is 161000 Mu lower than that in 2000, the fifth year of decline since 1990 From November to January, the decrease of the estimated harvest area is scattered, but the increase of the estimated harvest area in Minnesota and South Dakota Compared with the planting situation in 2000, the soybean planting area in the Midwest of the United States increased moderately in 2001, while the soybean planting area in the southern production area decreased The biggest drop was in Arkansas, which had 450000 acres Similarly, on January 11, 2001, the U.S Department of Agriculture released the grain inventory report on December 1, which showed that the U.S soybean inventory was 2.276 billion bushels, about 36 million bushels higher than the highest record inventory in the same period last year The inventory estimate means that the market consumed about 867 million bushels of soybeans in the first quarter of the year Consumption increased 55 million bushels compared with the same period last year, about 40 million bushels higher than the highest consumption recorded in 1997 / 98 According to the data reported by the US Census Bureau, in the first quarter of the market year, the domestic crushing volume totaled 427.7 million bushels, 6.8 million bushels higher than that in the same period of last year, and more than 1 million bushels higher than the highest record crushing volume two years ago In December 2001, the total press volume was about 153 million bushels, 10.7 million bushels higher than that in December 2000 Pressing is continuously driven by the demand for soybean meal, and the supply of soybean oil still exceeds the demand Soybean meal consumption in the United States is increasing, reflecting the growth of livestock and poultry But the growth rate is more moderate than last year, because the number of pigs is stable and the number of cattle is down The increase in soybean meal consumption is mainly due to the increase in poultry production US domestic soybean meal consumption is expected to grow by only 2%, up 4.5% compared with last year The consumption of soybean meal in China is expected to be 32.35 million tons U.S soybean meal exports were driven by low soybean meal prices and a sharp decline in Canadian rapeseed production As of January 17, the market's annual soybean meal commercial exports totaled 2.349 million tons, an increase of 11% over the same period last year As of January 17, the total volume of unsettled sales was 2.19 million tons, 25% higher than that of the same period last year Indonesia, Canada and Mexico accounted for most of the increase in US soybean meal exports USDA expects us soybean meal exports to be 7.9 million tons per year, about 3.5% higher than the 2000 / 01 market Soybean meal sales already account for 57% of USDA's export estimates US soybean meal sales are expected to slow significantly once South American soybean meal is launched But so far, there has been little reduction due to good demand expectations The market is expected to export 8 million tons of soybean meal annually Based on the current forecast, the U.S soybean meal consumption in 2001 / 02 market will reach 40.35 million tons The squeezing rate of soybean meal in the first four months of this market year was 47.55 pounds, compared with 47.9 pounds in the first quarter of last year Last year, the average crush rate was 48 pounds If the average crush rate is 47.55 pounds this year, it means that the total crush volume will need 1692 million bushels, allowing moderate imports and a certain decline in ending inventory If the squeezing rate of soybean meal increases like that at the beginning of the year, the squeezing amount will need to decrease to some extent It is expected that soybeans will be squeezed by 1.685 billion bushels The squeezing volume in the first quarter of this market year accounts for 25.4% of the total estimated volume The 5-year average is 25.64% If soybeans are pressed to 1.685 billion bushels, the soybean oil production will be 18.771 billion pounds, assuming that the yield of soybean oil is 11.14 pounds / bushel Based on the market's average oil production rate in the first four months of the year, the oil production rate is 0.1 lb / bushel lower than last year If domestic soybean oil consumption in the United States increases by 2% in the long term, consumption is expected to reach 16.55 billion pounds USDA forecasts soybean oil consumption at 16.7 billion pounds USDA forecasts soybean oil exports of 2.5 billion pounds, 78% higher than last year As of January 17, the commercial sales volume of soybean oil was about 30% higher than that of the same period last year This indicates that the total consumption of soybean oil in this market will be 19.05 billion pounds and the ending inventory will be 2676 million pounds U.S soybean exports totaled 348.3 million bushels in the first quarter of this market year, 32.8 million bushels or 10.4% higher than the same period last year The shipping volume is only 17 million bushels lower than the highest export volume recorded in 1997 Exports have remained large since December 1 The weekly export inspection report of the US Department of agriculture shows that the cumulative shipping volume as of January 17 was 555 million bushels, 15% higher than the same period last year The total volume of unsold sales as of January 17 amounted to 276.4 million bushels, 15% higher than the same period last year So far, the increase of shipping volume is mainly due to the increase of imports from EU, China, Japan, Mexico and Indonesia Undelivered sales to the EU, China and Mexico are much lower than last year Exports are expected to slow in the summer as South American soybeans go on the market Soybean production has expanded to northern Brazil, and early soybean cultivation has begun to harvest The size of soybean production in South America will be very important to determine the decline of soybean meal export in the United States The USDA now expects Brazil, Argentina and Paraguay to produce a combined total of 2.743 billion bushels of soybeans, 193 million bushels higher than last year It is expected that soybean production in these three countries accounts for 40.8% of the total global production, up from 39.8% last year and only 31.2% five years ago Increased production in Brazil and Argentina due to increased acreage and increased average yield per unit It is expected that Brazil's soybean planting area will increase significantly this year Soybean production in South America is still expected to be huge this year, with droughts in parts of southern Brazil and Argentina affecting some soybean crops Production is likely to be slightly below current USDA estimates The devaluation of the Argentine currency has also encouraged producers to increase their holding time of new soybean crops, but their storage space is limited Devaluation of currency is also conducive to the cultivation of soybeans USDA now forecasts soybean exports of 1.01 billion bushels in 2001 / 02, 12 million bushels higher than last year In order to meet the target export volume, the average export volume in the next 32 weeks of this market year only needs to reach 14 million bushels The market's exports in the next three quarters of the year will be 43 million bushels lower than the same period last year Although the export sales process will slow down, the market's annual total exports may be higher than the USDA estimates The estimated export volume is 1.02 billion bushels U.S soybean consumption, which includes feed, seeds and residues, is expected to reach a record high of 2.88 billion bushels This consumption means that the market's inventory at the end of the year is 263 million bushels, only 15 million bushels higher than that at the beginning of the year The highest recorded supply, highest recorded consumption, low price and moderate inventory are the fourth consecutive year 3 Production prospects in 2002: from 1991 to 2000, the soybean planting area in the United States increased every year In the past 10 years, the total planting area has increased by 16.47 million mu or 28.5% The increase in planting area is mainly due to economic factors and government plans The increased planting area is mainly concentrated in the western production area, with an increase of 13.95 million acres or nearly 60% The soybean planting area in the eastern corn belt increased by 33%, while that in the rest of the country decreased by 24% The growth of planting area ended in 2001, mainly due to the sharp decline of planting area in the southern production area In 2001, the total planting area of main crops decreased significantly In 2001, the area harvested for major agricultural products other than hay decreased by more than 7 million acres, the largest of which was the area planted for wheat and feed grains In 2002, some uncertain factors of soybean planting area still made the total area difficult to judge Will the total sown area continue to decline in 2002 or will the previously reduced area resume production? Part of the uncertainty about sowing area is mainly due to changes in farm plans Is CCC's loan rate to soybeans lower than that to feed grains and wheat? It is expected that the total sown area will be expanded moderately in 2002, mainly for feed grains Now it seems that the sown area of wheat and soybean will be stable The U.S Department of agriculture will release its planting intention report on March 28 The same planting area and the average yield close to the trend is 40 bushels / acre, which means that the soybean yield in 2002 was 2.92 billion bushels This production will allow consumption to increase by nearly 70 million bushels, and the end of the period inventory will remain at an appropriate level IV price outlook: In 2001 / 02, the average monthly price of soybean and soybean products in the United States was as follows: in September 2001, the average price of soybean was 4.52 US dollars / bushel; in October 2001, the average price of soybean was 4.14 US dollars / bushel, soybean meal was 165.45 US dollars / ton, soybean oil was 14.38 US cents / pound; in November 2001, the average price of soybean was 4.24 US dollars / bushel, soybean meal was 166.10 US dollars / ton, soybean oil was 15.23 US dollars / bushel In December 2001, the average price of soybean was $4.27/bushel, soybean meal was $154.18/ton, soybean oil was $15.10/pound; in January 2002, the average price of soybean was $4.27/bushel, soybean meal was $157.58/ton, and soybean oil was $15.08/pound Compared with the same period last year, soybean oil price increased by 1.8 cents / pound, soybean meal price decreased by 22 dollars / ton, and soybean price decreased by 38 cents / bushel So far, the average soybean price is basically the same as the mid point of the annual average price predicted by the U.S Department of agriculture The average price of soybean oil is close to the low end of the price range predicted by the U.S Department of agriculture, and the price of soybean meal is close to the high end of the price range predicted by the U.S Department of agriculture Current soybean price