Record November soybean oil sales pushed the U.S. export forecast higher this month. The surge in sales was unexpected as strong domestic demand and reduced production limited exportable supplies.  Furthermore, relatively ample supplies of competing oils, especially palm oil, were available to offset the reduced supplies in the United States.  Buyers had been expected to wait until early 2013 to purchase soybean oil from South America when supplies would be greater and prices more competitive.

However, increases in U.S. soybean production, following late-August rains, led to significant declines in soybean and product prices; soybean oil fell 20 percent to a two-year low by the first half of November.  This created a buying opportunity as near-term supplies in South America were much tighter and priced higher than the United States.  With U.S. soybean oil stocks forecast to be the lowest in nine years, and prices rebounding in the wake of these recent sales, additional large sales are less likely.

Overview

Global soybean production is forecast slightly higher, as the larger Canadian crop more than offsets reductions in the EU and Paraguay.  Global trade is up driven by stronger demand from the EU.

World imports for soybean meal are down, but up for oil.  The season-average U.S. farm price is estimated lower, but remains at a record.

Soybean Prices

U.S. export bids, FOB Gulf, in November averaged $571 per ton, down nearly $30 from the previous month.   The decline is largely attributed to harvest pressure, despite continued strong foreign demand.

As of the week-ending November 29, U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 17.5 million tons, compared to 15.8 million a year ago.  Total commitments to the world are 28.4 million tons, compared to 22.1 million for the same period last year.

2012/13 Trade Outlook

• U.S. soybean exports are unchanged.  Soybean meal and oil exports are raised 273,000 tons each to 7.4 million and 817,000 tons, respectively, to reflect large sales through November.  

• Canada’s soybean exports are boosted 600,000 tons to 3.5 million on larger supplies and to reflect stronger demand in the EU.  

• EU soybean imports are up 300,000 tons to 11.3 million to offset reduced supplies and to reflect stronger crush demand for meal.

• Paraguay’s soybean exports are cut 300,000 tons to 5.1 million on reduced supplies.

• Russia’s exports of sunflowerseed meal are up 260,000 tons to 860,000, and oil up 230,000 tons to 800,000 supported by strong demand from countries in Europe and the Middle East