The U.S. is on track to have a very tight soybean carryout this year, due almost entirely due to the “extraordinary demand from China,” says David Glidewell, Mid-South regional manager for ADM at Marion, Ark.

“Nobody in the farming business can afford to ignore China, or how important it is to the world and U.S. ag economies,” he said at the Mississippi Farm Bureau Federation’s annual commodity conference at Jackson.

While China is “the world’s largest producer of corn, soybeans, wheat, rice, cotton, pigs, ducks, chickens, and on and on,” he says, “they consume the vast majority of that production. To date, the only ‘crop’ they have not been self-sufficient in is protein,” and that lack was a boon for U.S. soybean producers in 2012.

A key reason, Glidewell says, is the shortfall in the South American soybean crop the previous year, “which gave us the sandbox pretty much to ourselves” for several months. “The demand pace has been such that, as we go into early spring, we’re going to see stocks levels that we would probably not normally experience.

“Soybean stocks are going to be very tight in the U.S. this year. However, we would not expect any degree of exports this summer, because the South Americans will take over world’s import needs with their large crop that will be coming off, “one of the largest on record.”

The world soybean stocks-to-use ratio is “a little more comfortable than the U.S.,” Glidewell says. “While the Midwest drought trimmed the U.S. soybean crop in 2012, there was not near as much yield destruction as in corn. With rains in late August and cool temperatures, soybeans proved once again they’re a pretty resilient crop, and yields were not much under 40 bushels per acre. The South, particularly the south Delta, had a very good soybean crop, as was the case with corn.

“The world soybean stocks-to-use ratio got tight because of the big shortfall in South America. The U.S. has had its stocks drawn down in making up that shortfall and supporting the tremendous demand in China.”