U.S. Soybean Sales Expand at Record Pace

Driven by large forward sales to China in late July and August, U.S. new crop soybean sales as of August 29 totaled 20.6 million tons, up 14 percent from last year’s record, and now represents over half of the current export forecast for the new year. Record sales beginning a marketing year do not necessarily lead to record exports throughout the year. However, this pace is a reflection of developments in the two major South American countries. Brazil’s exportable supplies have declined faster than anticipated after exporting record quantities in each month since April. Meanwhile, Argentine exports have remained slower than expected, as farmers hold supplies in anticipation of greater returns.

Despite record early-season sales, U.S. exports will face stiffer competition over the coming months. Increased exportable supplies in South America this fall combined with the current forecast of another record harvest in 2014 will likely narrow the export window for U.S. soybeans.

OVERVIEW

For 2013/14, global soybean production is virtually unchanged as larger crops in Brazil and Paraguay mostly offset by reductions in Canada, China, Russia, and the United States. World trade is higher driven by record exports from Brazil and Paraguay. The season average U.S. farm price is up on reduced stocks.

For 2012/13, global soybean production is marginally lower with a smaller crop in Argentina. World trade is up driven by stronger demand in China. The season average U.S. farm price is unchanged.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in August averaged $516/ton, down sharply from the previous month. Despite elevated prices in the past few weeks due to concerns over dry weather and strong demand in China, the monthly average fell impacted by lower prices in the beginning of the month.

As of the week-ending August 29, U.S. 2012/13 soybean commitments (outstanding sales plus accumulated exports) to China totaled 21.6 million tons compared to 24.7 million a year ago. Total commitments to the world are 37.2 million tons, compared to 38.8 million for the same period last year.

2013/14 TRADE OUTLOOK

• U.S. soybean exports are down 409,000 tons to 37.3 million on a reduced crop.

• Argentina’s soybean exports are cut 1.0 million tons to 12.7 million in response to stronger competition from Brazil. Soybean meal exports are up 575,000 tons to 28.4 million on expectations of larger crush.

• Brazil’s soybean exports are up 1.0 million tons to a record 42.5 million, and Paraguay’s exports are raised 500,000 tons to a record 5.5 million supported by large crops.

• China’s soybean exports are cut 100,000 tons to 200,000, and Russia’s exports are cut 100,000 tons to 50,000 on reduced crops.

• EU and Ukraine’s sunflowerseed exports are up 150,000 tons each to 600,000 and to 300,000, respectively, supported by record supplies and stronger demand in Turkey.

• India’s peanut exports are up 200,000 tons to 700,000 tons supported by a near record crop.

• Indonesia’s palm oil exports are up 300,000 tons to 21.3 million on expectations of stronger demand.

2012/13 TRADE OUTLOOK

• U.S. soybean meal exports are up 182,000 tons to 10.1 million supported by continued strong shipments to date.

• Argentina’s soybean exports are cut 675,000 tons to 6.4 million on slower farmer selling. Soybean oil exports are down 110,000 tons to 4.0 million on increased domestic use.

• Australia’s rapeseed exports are raised 250,000 tons to a record 3.4 million supported by demand in China.

• Brazil’s soybean exports are boosted 1.8 million tons to 41.0 million benefitting from slow shipments from Argentina. Soybean meal exports are lowered 100,000 tons to 13.0 million impacted by lower crush.

• China’s soybean imports are up 500,000 tons to 59.5 million on expectations of large purchases from South America in August and September. Rapeseed imports are raised 300,000 tons to 3.2 million on strong July imports from Australia. Rapeseed oil imports are up 100,000 tons to 1.5 million reflecting larger purchases from the EU and Ukraine. Sunflowerseed oil imports are up 110,000 tons on a record monthly volume from Ukraine in July.

• India’s soybean meal exports are up 150,000 tons to 4.1 million tons on improved shipments through August.

• Indonesia’s palm oil exports are up 200,000 tons to 20.3 million based on strong year-to-date shipments