Exports of U.S. soybeans during the current year are projected at 1.35 billion bushels. With only about three weeks left in the marketing year, cumulative export inspections (adjusted by Census Bureau estimates through June) totaled 1.3 billion bushels. Shipments will need to average about 16 million bushels per week for the next three weeks to reach the USDA projection.

Shipments for the 7 weeks ended Aug. 9 averaged 15.5 million bushels per week. “It appears exports for the year will be very close to the USDA projection,” Good said. “If so, stocks of old-crop soybeans on Sept.1 could be 10 to 15 million bushels less than the current forecast of 145 million.”

For the 2012-13 marketing year, Good said the USDA projects a 175-million-bushel reduction in the domestic crush, to a 16-year low of 1.515 billion bushels. The magnitude of the decline would be larger if this year’s crush exceeds the current projection.

Exports of U.S. soybeans are expected to decline by 240 million bushels, to a 7-year low of 1.11 billion bushels. As of Aug. 9, the USDA reported cumulative sales of 597 million bushels for export during the 2012-13 marketing year.

Of that total, 392 million were sold to China and 154 million to unknown destinations. Including likely carryover sales from the current year, export commitments are likely near 675 million bushels, or 61 percent of the USDA projection for the year.

“Shipments of U.S. soybeans are expected to be large in the first half of the marketing year, but demand during the last half of the year will be influenced by the size of the South American crop,” Good said.

The USDA currently projects South American soybean acreage will increase by 2.7 million acres in 2013 (mostly in Brazil) to a total of 128.9 million. With a return to normal yields, that crop is projected at 5.45 billion bushels, 30 percent larger than the drought-reduced crop of this year.

Good said that a crop of that size would likely result in a larger-than-normal seasonal decline in U.S. soybean and soybean meal export shipments in the last half of the marketing year. Some additional imports of soybean meal would also be expected.

November 2012 soybean futures are currently more than one-third higher than the low established in early June, about $1.35 higher than the low of July 25, and only about 20 cents below the contract high of July 23.

“Most of the price increase since early June has been led by soybean meal prices. U.S. soybean oil stocks will be used to support oil consumption during the year ahead,” Good said. “But soybean meal consumption will have to be reduced substantially.

“There is some expectation that more favorable weather in August in some areas will increase the yield potential of late maturity soybeans,” he concluded.

“Unless the crop is substantially larger than the August forecast, soybean meal and soybean prices will likely remain high for an extended period in order to ensure the necessary rationing. If the production forecast does not increase next month, new highs in both markets would be expected,” Good said.

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