US SOYBEANS

by Matthew Wilde
ISA senior writer

58 | Milling and Grain

S

oybean buyers worldwide are on a spending spree, restocking supplies and
propping up prices. But that soon could come to an end. A Des Moines risk
management consultant advises farmers to sell now because US$10-plus
soybeans, while nothing to write home about, may look good in months to
come.
“The market is short-term friendly and long-term bearish,” said Matt
Campbell of INTL FC Stone. “I’m very much a believer in marketing old
and new crop beans. They are overpriced.”
Cash soybeans are more than $9.80 per bushel throughout much of the
state. January beans on the Chicago Board of Trade closed at $10.33 per bushel on Monday.
In anticipation of a record soybean crop and the highest carryout figure in years, many
commodity analysts predicted prices would plummet to $8.50 per bushel or less during harvest.
Record domestic and export demand prevented a free-fall.
Eventually, Campbell said the buying frenzy will slow and large supplies will remain. He
expects a price drop to occur, albeit later than original projections.
“The bean market will start to fail in the next few months,” he said. The US soybean harvest is
nearly complete, according to Monday’s weekly U.S. Department of Agriculture (USDA) Crops

and Weather Report. Only three percent and one percent of the
crop, respectively, still remains in fields nationwide and in Iowa.
Typically, all soybeans are in the bin or off to market by now
in Iowa and the other leading soybean producing states.
“The cold weather and snowfall continue to create challenges
for farmers,” said Bill Northey, Iowa Secretary of Agriculture,
but not to the point supply is an issue.
The November USDA World Agricultural Supply and Demand
Estimates (WASDE) Report pegged the nation’s soybean crop at
nearly 3.96 billion bushels, 31 million higher than the October

06 07 08 February 2015
An
Exposition
business
to xpand....your
xplore....your market

E

nsure....your future

New Grain Market, Karnal
(Haryana) India

India's Largest Technology Oriented International
Exhibition & Conference on Rice Milling Industry

Media Partners
ATS
ALL TIMES SOLUTION

Axis
Publication
Pvt. Ltd.

ADAMAS Events Pvt. Ltd.

Organizer

SCO 27, IInd Floor, Mugal Canal,
KARNAL-132001, Haryana, India
RME.Intl@gmail.com
www.ricemillingexpo.com

January 2015 | 59

forecast. The increase, though, was almost entirely offset by
higher soybean export and crush projections.
U.S. soybean exports for the 2014/15 marketing year are
estimated at 1.72 billion bushels, up 20 million bushels from
October estimates, according to the WASDE report. The soybean
crush is forecast at 1.78 billion bushels, up 10 million due to
increased exports.
Grant Kimberley, Iowa Soybean Association market
development director, said robust demand is keeping prices from
bottoming out. Crush margins are strong, livestock prices are
profitable prompting expansion and soybean prices are several
dollars lower than previous years.
“If I’m a buyer, I’m pretty happy,” Kimberley said. “Ultimately,
it will come down to what kind of crop Brazil and Argentina
have. If it’s good, prices will come down. If it’s a little lower than
expected or there’s shipping disruptions, then that will help hold
the line on prices and maintain the current floor,” he continued.
“There’s always ‘what ifs’ in farming.”
Right now, though, there are plenty of ships full of soybeans
and soybean meal heading overseas. China is and continues to be

the big buyer of whole soybeans while the Philippines and other
Pacific Rim nations are purchasing boatloads of meal.
For the first time in US history, soybean exports exceeded two
million metric tons, or nearly 73.5 million bushels, for three
consecutive weeks. According to the USDA, the record-setting
streak ended on November 7-13 when exports exceeded 113
million bushels — a marketing-year high.
“The trade has continuously underestimated China the last five
years. It’s always speculated they will cancel a lot of contracts
or cut back, but that doesn’t happen as much as analysts think,”
Kimberley said. “I’ve been there 10 times and that train isn’t
stopping. It’s a big train.”
This month the USDA projected soybean ending stocks for the
2014/15 marketing year at 450 million bushels, unchanged from
October. That’s compared an estimated 92 million bushels the
previous marketing year and 141 million in 2012/13.
The USDA estimates the US season-average soybean price at
$9 to $11 per bushel. It was $14.40 during the 2012/13 marketing
year and $13 the previous year when supplies were tight.
Despite a drop in soybean prices, Campbell believes farmers
nationwide will plant even more
acres next year. Another three
million from this year’s record
harvest area of 83.4 million acres
nationwide is likely, he contends.
Record soybean demand and
current corn prices — about
$3.50 per bushel cash and about
40 cents more for May delivery
on the Chicago Board of Trade
— are working in soy’s favor,
Campbell said.
“Producers are better off at
today’s prices planting beans,”
he continued. If farmers do
increase soybean acres next
year, Campbell said prices won’t
improve much, if any, even if
yields are subpar. “If you’re
making input decisions today,
you have to be making sales
today,” he said.

Next month

Milling and Grains market
analyst John Buckley returns
with his review of world
trading conditions which are
impacting the full range of
commodities used in food
and feed production. His
observations will influence
your decision-making.

60 | Milling and Grain