US Soybean Market

Goals

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.

Early Findings

Price Forecasts

  • 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.

Supply

Demand

  • 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 16.5%, 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 oilseed trading."
  • 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 timeframe. 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."


Proposed next steps:

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As the initial research only reviewed some of the available publications, we recommend further review of sources published within the last month to 45 days for insight into the demand, supply, and price outlook of the US soybean market.
Additionally, we recommend further review of the recently available expert analysis for the US soybean market outlook by compiling 5-7 expert analysis publications from the past month to two months.