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• Prospects for high net returns and crop insurance revenue coverage support combined 2013 area for wheat, corn, and soybeans very near last year’s 30-year high.
Domestic soybean use
Soybean domestic use: Soybean domestic use is projected at 1,795 million bushels, up 3 percent from 2012/13. Crush is projected to expand by 45 million bushels to 1,660 million — supported by more competitive soybean meal exports and a moderate increase in domestic demand.
Based primarily on expansion in the pork and poultry sectors, domestic soybean meal feeding is projected up 1.7 percent. In line with the decline in soybean prices, increased global supplies are also seen easing soybean meal prices.
A decline to $300 per short ton is projected for the 2013/14 average price for soybean meal — down sharply from the midpoint of the forecast range for 2012/13 at $445.
In contrast, supplies of soybean oil for 2013/14 would tighten further due to a sharp contraction in beginning stocks. A lower supply would particularly impair the competitiveness of U.S. soybean oil exports. Domestic use of soybean oil is projected to rise only 0.6 percent in 2013/14 to 18.0 billion pounds.
The domestic soybean oil market will be primarily supported by an increase in the biodiesel use mandate for 2013 to 1.28 billion gallons. The use of soybean oil for U.S. biodiesel production is projected at 5.2 billion pounds—up 300 million from 2012/13.
At this level, soybean oil accounts for just over half of expected U.S. biodiesel production. However, a 1.5-percent projected decline for 2013/14 in food use of soybean oil to 12.8 billion pounds would partly offset the gains in use for biodiesel.
Although soybean oil ending stocks for 2013/14 are projected moderately tight at 1.71 billion pounds, this would be up 40 million from 2012/13. Soybean oil prices are projected relatively stable for 2013/14 at an average of 51 cents per pound, which would boost its share of the total processing value for soybeans.
Soybean exports: U.S. exports are projected to rise to 1.5 billion bushels in 2013/14 on larger supplies and increasing foreign demand, boosting the U.S. share of global trade. However, U.S. exports will likely face stiffer competition from South America, where exportable supplies will be much higher than in 2012/13.
Foreign demand will be driven by China, which typically accounts for more than half of world imports. Key factors supporting China’s imports for 2013/14 include expansion in the crushing sector, strong demand for soybean oil in food, greater use of commercial feed that contains higher percentage of soybean meal, and policies on government reserves.
In contrast, minimal increases are anticipated in soybean demand by other top importing countries – including the EU-27, Japan, and South Korea.
Modest growth is expected for world trade in soybean meal supported by stronger demand in the EU and Southeast Asian countries. U.S. exports are projected to grow 4.0 percent in 2013/14 to 9.15 million short tons.
Exports by Argentina are expected to expand from drought-reduced levels in 2012/13, while exports by Brazil and India are likely to remain near recent levels due to continued growth in domestic use.
U.S. soybean oil exports are projected at 1.3 billion pounds — a 43-percent decline from 2012/13 due to a tightening supply. South American exporters will likely dominate trade with larger supplies and reduced use of soybean oil for biodiesel, particularly in Argentina.
Soybean oil shipments to top importers India and China are expected to be limited by a rebound in the palm oil trade.
Soybean ending stocks and farm prices: U.S. soybean ending stocks for 2013/14 are projected at 250 million bushels, the highest since 2006/07 and double the level projected for 2012/13.
Despite a 7-percent increase in total use of soybeans, the ending stocks-to-use ratio of 7.6 percent would be above the 5-year average of 5 percent and the highest in the past 7 years.
With a sharp increase in production and ending stocks and lower corn prices, the season-average farm price for soybeans is projected at $10.50 per bushel, down from the $14.30 midpoint of the 2012/13 projected range.