What is in this article?:
- Soybean export, acreage prospects supporting prices
- Looking good for U.S.
• The attention has been the result of the surprising USDA Dec. 1 stocks estimate, adverse weather conditions in South America, the demise of the ethanol blenders’ tax credit, and prospects for small year-ending stocks.
“Although the corn market has received the lion’s share of attention over the past two months, the soybean market has become the focus of more attention in recent weeks,” says University of Illinois agricultural economist Darrel Good.
The attention has been the result of the surprising USDA Dec. 1 stocks estimate, adverse weather conditions in South America, the demise of the ethanol blenders’ tax credit, and prospects for small year-ending stocks.
Corn prices have declined marginally since the first of the year, but soybean prices, particularly for the 2012 crop, have increased. The strength in the soybean market is being generated by deteriorating crop prospects in South America and expectations for fewer planted acres in the United States this year.
In last week’s World Agricultural Supply and Demand Estimates (WASDE) report, the USDA lowered the projected size of the 2012 South American crop by 215 million bushels, or 4.3 percent. That reduction comes on the heels of a 90 million bushel reduction last month. At 4.765 billion bushels, that crop is now expected to be 4.6 percent smaller than the 2011 crop and 3.4 percent smaller than the 2010 crop.
Although the USDA lowered the forecast of South American soybean exports by 105 million bushels, the projection of United States exports was not increased.
Instead, both projected world imports and projected South American stocks were reduced. Nearly half of the 80-million-bushel reduction in projected world imports was for China, reflecting lower-than-expected imports in the last quarter of the 2011 calendar year.
“Weather conditions in Argentina over the past month were not as adverse as in December and early January, but conditions there and in southern Brazil and Paraguay have been far from ideal,” said Good.
“Precipitation levels have been below average in recent weeks, and there is potential that soybean production will be even less than currently forecast.”