United States soybean exports will play a significant role in determining soybean prices this marketing year. According to University of Illinois agricultural economist Todd Hubbs, the recent level of soybean exports from the United States trails last year’s pace.
“The prospect of ending stocks for soybeans, once again diminishing throughout the marketing year, hinges on increased soybean exports,” Hubbs says. “The development of a lowered ending-stock scenario during 2017-18 may require a shortfall in South American production or U.S. exports capturing a greater market share of the world soybean trade.”
The current projection for U.S. soybean exports during the 2017-18 marketing year is 2,250 million bushels. This forecast is 76 million bushels larger than last marketing year’s total exports.
“Although we’re only 12 weeks into the marketing year, exploring the current pace of exports is of value because soybean exports from the U.S. typically slow as the South American soybean crop enters the world market during spring,” Hubbs says.
Census Bureau export estimates are only available for September, coming in at 170.5 million bushels, up 32 million bushels over the previous period last marketing year. Census Bureau exports exceeded weekly export inspections by 9 million bushels over the same time.
“Soybean exports through Nov. 16 equaled 713 million bushels if the margin at the end of September stayed consistent,” Hubbs says. Soybean export inspections currently trail last year’s pace by approximately 12 percent. “At this point in the marketing year, export inspections need to average 37.7 million bushels per week to meet the USDA projection. As of Nov. 9, 573 million bushels of soybean had been sold for export but not shipped. The current unshipped export sales trail the 716 million bushels sold at the same time last year. The pace and sales of soybeans currently lag last year’s pace. A brief look at the supply and demand situation can provide clarity on the prospects of meeting or exceeding the USDA projection,” Hubbs says.
U.S. soybean production is currently projected at 4,425 million bushels for the 2017 crop. This production level is 129 million bushels larger than the 2016 crop and is set to push ending stocks for the current marketing year above 400 million bushels despite the current export projection level. South American production is forecast to be 4.8 percent lower than 2016-17 production levels. This lower projection is despite a 3 percent increase in projected harvested acres in the region, mainly driven by an increased prospective planting of soybean acreage in Brazil. The lower production levels occur due to a lower projected yield in the region. Brazil’s soybean yield in 2016-17 came in at a record 50.1 bushels per acre, up from the drought-induced 43.1 bushels per acre yield in 2015-16. Current yield projections for Brazil in the 2017 crop sit at 45.9 bushels per acre.
“Although it appears reasonable to assume Brazil will not reach its record yield level again in 2017, the increased production level in the U.S. and expanded acreage in South America provide the prospect of plentiful supplies over the next year,” Hubbs says.
According to Hubbs, export demand over the last decade has been driven by the dramatic expansion of soybean imports from China. Currently, USDA projections for Chinese soybean imports for 2017-18 are 3,564 million bushels. The current level is a 3.7 percent increase from last year’s Chinese soybean import estimate. By using data from the USDA’s Foreign Agricultural Service, the U.S. share of Chinese soybean imports since the 2010-2011 marketing year averaged approximately 38 percent of total Chinese imports.
“If we assume this market share for the 2017-18 marketing year, total U.S. exports to China would equal 1,343 million bushels, a mere 11.5 million bushels greater than the 1,331 million bushels exported to China in the 2016-17 marketing year,” Hubbs says. “If China expands imports to 3,764 million bushels as some reports have indicated, a similar calculation of U.S. share comes to 1,385 million bushels.
Current projections for other major importers (the European Union, Japan, Mexico, and Southeast Asia) are expected to increase 52 million bushels to 1,112 million bushels for the 2017-18 marketing year. “The prospect of meeting the current U.S. soybean export forecast may rely on acquiring a larger market share of the world’s soybean import expansion when considering the prospects for crops in South America,” Hubbs says.
Hubbs adds that U.S. soybean exports need to continue to build on the strength seen in the 2016-17 marketing year. “The ability to exceed the current USDA export projections in 2017-18 is a possibility, but it is heavily dependent on South American production and the continued growth in demand from importers. If major importer demand grows at the projected rate, the soybean export and ending-stock projections outlined in the November World Agricultural Supply and Demand Estimates report supply and demand figures appear to be reasonable approximations for the 2017-18 marketing year.”
Source: University of Illinois
Despite significant technological advancement in modern agriculture such as improved genetics, modern chemistries to control pests, equipment to aid in efficiency, and several other up-to-date management strategies, we still largely depend on nature to maximize crop production and profitability. Weather conditions (both short- and long-term) significantly affect major crop production. Crop producers are concerned with precipitation and temperature on a day-in-day-out basis.
Drought & Heat Stress: Impact on crops
South Dakota has seen higher than average temperatures in the last few weeks and the current U.S. drought monitor (June 6, 2017) shows that almost 80% of the state is facing moisture deficit conditions with Central and North Central region facing the worst—other parts of the state even though not as severe still show large areas of dry conditions. Producers generally think this is too early in the season to be in such situation. Weather conditions are highly variable within a small geographical area and so can the soil moisture depending on the growing region and the type of crops planted on any given time.
Winter Wheat & Small Grains
Generally, fields with winter wheat and other spring small grains can show less moisture in the soil profile than corn and soybean fields as small grains start growing and using moisture earlier in the season. Moreover, winter wheat growing regions such as Central and Western S.D. are showing more moisture deficit conditions because soils were already dry last fall when the crop was seeded. Crops in these fields were showing typical drought symptoms such stunted plants, rolled up leaves, and in some cases highly dried leaves as early as late May. Many producers in these Regions, especially those with livestock, were even considering harvesting the crop as hay rather than grain.
Corn & Soybeans
The soil in corn and soybean fields can sometimes reveal a different picture—since plants are fairly small and may not have used as much moisture like small grains. However, they may still show stress, which could be due to drying up of the top 1-3 inches of soil as a result of consecutive warmer temperatures during the last few weeks. There could still be enough moisture deeper in the profile for plants to utilize as they develop their root system.
Assessing Soil Moisture
The best way to assess soil moisture is to use a soil probe and “feel” the extracted soil from deeper profile for moisture. In this situation, plants can show drought-like symptom such as curled leaves in the morning, which could be entirely due to extreme heat rather than soil moisture deficiency. Although drought and heat stress can go hand-in-hand most of the times on a production system, they can have different outcome depending upon the soil type and crop growth stage. In the current SD situation young corn and soybean plants showing heat stress may recover quickly and efficiently when compared to small grain crops which are more advanced in their growth stage.
Source: David Karki, iGrow
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