A record state and national soybean crop will likely open doors to new marketing opportunities, according to Iowa Soybean Association (ISA) leaders.
Iowa’s soybean harvest, projected at nearly 550 million bushels, is nearly complete. According to today’s U.S. Department of Agriculture’s (USDA) Crop Production Report, this year’s crop will eclipse the previous record set in 2005 by almost 25 million bushels. Soybean yields statewide are estimated at 56 bushels per acre, up 3 bushels from last month.
The report pegged national soybean production at an all-time high of nearly 4 billion bushels, about 94 million bushels higher than last month’s projections. The average yield nationwide is estimated at 48.3 bushels per acre, up nearly 1.1 bushels from last month mainly on gains in the Midwest.
“We have a large crop and stocks are up, but strong domestic demand from U.S. livestock producers, increased demand for biodiesel and higher exports are going to help us work our way out of this situation,” said Kirk Leeds, ISA CEO. “Last year 59 percent of soybean production went overseas and we are committed to continuing to build and strengthen relationships in other countries.”
Demand for U.S. soybeans is strong. Production is stronger due to nearly ideal growing conditions in much of the upper Midwest.
U.S. soybean ending stocks for the 2015/16 marketing year are estimated at 465 million bushels, according to today’s USDA World Agricultural Supply and Demand Estimates (WASDE) Report. Up 40 million bushels from last month.
Domestic crush for the current marketing year was raised 10 million bushels to nearly 1.9 billion bushels on higher meal exports, the WASDE Report said. Whole bean exports are estimated at more than 1.7 billion bushels, up 40 million from October’s report.
Since much of the nation’s soybean crop is in the bin or off to market, commodity analyst and broker Al Kluis expects little to no change when final production numbers are released in January.
Kluis, who owns Kluis Commodities in Minnesota and also farms, anticipates domestic soybean usage and exports will climb resulting in lower than forecasted ending stocks. And likely higher prices in the future. He recommends farmers be patient.
“There will likely be weather problems in South America and it’s unlikely the U.S. will experience another near-perfect growing season and another record crop,” Kluis said. “Basically, hold on to your beans.”
The USDA season-average soybean price is projected at $8.15 to $9.65 per bushel, down 25 cents on both ends of the range.
Kluis said the USDA price estimates is usually pretty accurate. He expects prices will be in the upper end of the spectrum by the end of the current marketing year.
ISA President Wayne Fredericks, who farms near Osage, said whole beans and soy products are more price competitive than ever, which will likely spur sales and product development.
“New demand is never built during market highs,” he said. “Doors to opportunities may open in markets where prices previously kept us from gaining a foothold. Now is the time to grow necessary future demand because price can work to our advantage.”