Prepared for Einars R. | Delivered August 8, 2019
US Soybean Market
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Provide a market forecast for the US soybean market, including near term forecasts of US soybean prices and fundamentals of that market, including supply, demand and market outlook for 2019 and 2020 in order to inform investment decisions.
According to the USDA, "moderately tighter U.S. supplies may boost prices in 2019/20, which are now seen averaging 15 cents higher to
$8.40 per bushel
" as of July 15th, 2019.
For the current market year ending August 31st, the USDA is projecting a yield of
4.544 billion bushels of soy
, down from their estimate of 4.6 billion bushels two months prior.
Yield estimates are currently at
51.6 bushels an acre
, according to the USDA, also down from their previous estimate of 52.1 bushels.
U.S. ending stockpiles of soybeans
are now seen at 910 million bushels."
It is estimated that US soybean production will
remain relatively flat from 2019-2012
, with increases beginning in 2022.
The US primarily exports its soybeans to China. "
Soybean crush and exports
are expected to increase 280 million bushels and 282 million, respectively, from the baseline year of 2014 through to 2023."
Exports to China are down
, mostly due to the trade war.
US demand for soybean meal, used as animal feed, is "
expected to increase approximately
7.4 million tons from 32.3 million in 2014 to 39.6 million in 2023."
Market Growth Outlook
According to a report on CNBC published August 8th, "
U.S. soybean futures inched down
on Thursday as traders remained anxious about a protracted trade war between Washington and Beijing that is threatening
According to the Department of Agricultural and Consumer Economics at the University of Illinois, "
Soybean prices appear more vulnerable
to downward price movements given current supplies and the expectation of a growing crop size in 2019."
According to Seeking Alpha, "
prices for soybeans will most likely remain
at current levels or fall further in 2019 barring any significant weather events in the July-August
. Unlike corn, which does have some fundamentals in its favor, the bearish sentiment for soybeans is justified moving forward. Prices will continue to move downward until farmers reduce acreage or additional feed demand emerges. Until then, expect the bearish price action in soybeans to continue through 2019."
According to a
report published on AgWeek on July 21st
, "soybean futures dropped back below $9 again as a cooler and less threatening extended forecast is keeping the bears in control. Export sales continue to be lackadaisical, and that will only lead to more ending stocks carrying over to the 2019-20 marketing season. Brazil continues to grow its market share of exports to China as the trade war between the U.S. and China goes into the second year."