What is in this article?:
- Soybean market anticipates adequate supply until harvest begins
- Exports close to projected levels
• Assuming the 2013 U.S. soybean crop is near its potential of 3.4 billion bushels, rationing should not be an issue in the 2013-14 marketing year.
• The strength of demand for U.S. soybeans then will determine price and magnitude of consumption.
The recent drop in old-crop soybean prices means the market expects adequate supplies until the 2013 harvest begins.
“For that to be the case, domestic crush in July and August would have to be down sharply from last year’s levels and sharply below the June 2013,” Darrel good, a University of Illinois agricultural economist said.
For old-crop soybean stocks at the end of the year to be at a pipeline level of 125 million bushels, and to accommodate exports of 1.33 billion bushels, the size of the domestic crush for the year ending August 31 will be limited to 1.66 billion bushels.
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"That is 2.5 percent less than the crush in the previous year,” he added.
Based on estimates from the National Oilseed Processors Association, the domestic crush exceeded that of last year in each of the first five months of the current marketing year (September 2012 through January 2013).
The crush was about equal to that of a year ago in February 2013 and was less than that of a year ago in each month from March through June. The crush in both May and June was about 11 percent smaller than in the same months in the previous year.
For the entire 10-month period, the crush this year exceeded that of last year by about 1.6 percent.
“The crush during the final two months of the marketing year needs to be 24 percent less than that of a year ago in order to maintain a minimum pipeline supply by year end. The size of the needed reduction underscores the surprise in the timing and magnitude of the recent collapse of old-crop soybean prices,” Good said.
According to Good, it’s possible the domestic crush could be larger than 1.66 billion bushels if exports fall short of the 1.33-billion-bushel projection, ending stocks are reduced to less than 125 million bushels, or June 1 stocks were actually larger than estimated.