March 29, 2024

USDA sees hike in soybean prices

WASHINGTON — Slightly higher production was offset on the demand side to keep average farm price projections within the range of previous U.S. Department of Agriculture supply and demand estimates reports.

Here are highlights of the USDA world agricultural supply and demand estimates report released Jan. 10.

Soybeans: USDA increased the season-average price for 2019-2020 by 15 cents from last month to $9 per bushel.

Why?

• The increase from the previous month is in part reflecting stronger soybean oil prices. The soybean oil price forecast was increased 3 cents to 35 cents per pound.

• Soybean production is estimated at 3.56 billion bushels, up 8 million on a higher yield.

• Harvested area is estimated at 75 million acres, down 0.6 million from the previous forecast, with the largest reductions for North Dakota and South Dakota.

• Yield is estimated at 47.4 bushels per acre, up 0.5 bushels led by increases for Illinois and Indiana.

• Soybean supplies are relatively unchanged as lower beginning stocks and imports offset higher production. With crush and export forecasts unchanged, ending stocks are projected at 475 million bushels.

• Foreign oilseed 2019-2020 production is up 0.2 million tons to 467.2 million, with higher sunflower seed production partly offset by lower cottonseed, rapeseed and palm kernel.

• Lower global vegetable oil production paired with increasing demand results in a 9% year-over-year decline in vegetable oil stocks. Other notable oilseed changes include a 0.5-million-ton increase to Chinese soybean crush due to a higher-than-expected pace to date.

Corn: The season-average price received by producers was left unchanged from last month to $3.85 per bushel.

Why?

• Beginning stocks were increased by 107 million bushels reflecting upward revisions to both on-farm and off-farm stocks as of Sept. 1 as reported in the grain stocks report.

• Corn production is estimated at 13.692 billion bushels, up 31 million as a higher yield more than offsets a reduction in harvested area.

• Total corn use is up 155 million bushels to 14.07 billion. Exports were lowered by 75 million bushels to 1.775 billion, reflecting the slow pace of shipments through December and the lowest level of outstanding sales as of early January since the 2012-2013 marketing year.

• Feed, seed and industrial use was lowered 20 million bushels, with lower projected corn used for starch, glucose and dextrose and high fructose corn syrup.

• Feed and residual use was raised by 250 million bushels to 5.525 billion, based on indicated disappearance during the September-November quarter and the 2018-2019 marketing year as reflected by the grain stocks report.

• With use rising more than supply, 2019-2020 corn stocks were lowered by 18 million bushels to 1.892 billion bushels.

• Foreign corn ending stocks were lower, mostly reflecting reductions for China and Brazil. Global corn stocks, at 297.8 million tons, are down 2.8 million.

Wheat: USDA left the season-average farm price at $4.55 per bushel.

Why?

• Feed and residual use was increased by 10 million bushels on lower than expected second quarter stocks reported in the latest grain stocks report.

• Seed use was down 1 million bushels reflecting the 2020-2021 wheat planted area.

• Ending stocks are projected at 965 million bushels, down 9 million from the December report.

• Foreign production for the 2019-2020 marketing year is dropped 1 million tons led by a 1-million-ton reduction for Russia on updated government production data and a 0.5-million-ton decrease for Australia reflecting the severe drought conditions in parts of the country.

• With foreign supplies falling and total use increasing, foreign ending stocks were lowered by 1.2 million tons to 261.8 million.