CHAMPAIGN, Ill. – China’s strong demand for soybeans will
keep stocks tight and prices at generally high levels.
China is projected to import 2.5 billion bushels of soybeans
this year, representing two-thirds of the soybeans traded and 24 percent of the
soybeans produced worldwide.
“The deciding factor on exports has been China. Even with
large South American crops and large U.S. crops, we’re not seeing a buildup in
soybean inventory due to the demand from China,” said Darrel Good, University of
Illinois Department of Agricultural and Consumer Economics professor emeritus.
“We have seen soybean exports maintained at very large levels.
“The decline last year was basically because we ran out of
soybeans. We didn’t have many more soybeans available for export than what we
shipped,” he said.
Soybean sales have been moving at rapid pace as 96 percent
of the projected exports have been sold with 35 weeks still remaining in the
marketing year. China has accounted for about 93 million bushels of U.S. soybean
export sales this year.
Total U.S. soybean exports for the current year are
projected at 1.475 billion bushels, up from 1.32 billion last year.
“On the surface, one would say either USDA has
underestimated export demand or prices have to move higher to shut that off or
China is going to cancel some of their purchases,” Good said at the Illinois
Farm Economics Summit.
“The big issue in the soybean market right now is if the
South American crop turns out to be as large as we think it is — and if the
soybean prices go lower, will we see some cancellation of those U.S.
“The market seems to think that is the case at this point
and foresees cancellation of sales as we move forward.”
One factor that has changed in the soybean market the last
couple of years has been the increased production of biodiesel.
“There’s been a fairly sizeable increase in the use of
soybean oil for biodiesel. It is expected to go up again in 2014, but that
projection is questionable now because of the EPA proposal to scale back the
mandate,” Good said.
The economist doesn’t foresee any major changes in the
current soybean prices unless there is a major drop in demand.
Soybeans have averaged $11.52 per bushel since December
2006. Most recently, prices have been above that average and are now beginning
to move lower.
Good said there are several reasons soybean prices have
remained at slightly higher levels relative to corn.
Soybean production dropped to 3.034 billion bushels in the
2012 drought, and this year’s estimate is 3.258 billion bushels.
“We’re not seeing as large of a rebound in production in
2013. The crop is large, but it is not a record large and only marginally larger
than we’ve had the last few years,” Good said. “We’re not putting as much supply
pressure on the soybean market in recent months as we have the corn
Ending soybean stocks are estimated at 150 million bushels,
9 million more than in 2012-2013.
The USDA estimates 75.7 million harvested acres for soybeans
this year, down from 76.2 million acres in 2012.
“I think we will see a tick-up in soybean acres in 2014. How
much is needed will be a function of how big the crop in South America turns out
to be,” Good said. “Prices, right now at the margins, are encouraging some
increase in soybean acres at the expense to second-year corn or continuous
“If acreage goes up and there are trend yields of 44 bushels
in 2014, we’re looking at a sizeable soybean crop. We would expect to see this
pattern of tight year-end stocks reverse a little bit and probably move back
into a minor buildup of soybeans.”
The average price for the current marketing year is
projected to average $12.50 per bushel, and Good estimated prices will move down
to $11 to $11.50 next year.