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Executive Summary
Drivers for the soybean industry include a smaller domestic crop, weakening prices, and pressure from South America.
Supply/Demand
U.S. soybean harvest started Sept. 18 with 55% of the soybean crop in good or excellent condition. The USDA estimates the 2022-23 crop to be 4.38 billion bushels, down 1.3% from the 2021-22 crop. Ending stocks declined year over year based on lower beginning stocks, yields and production.
U.S. soybean production was reduced due to losses in the Eastern Corn Belt and Central Plains. Both regions experienced multiple headwinds of late planting followed by excessive heat with little rain. Only two of the major corn growing regions, the Delta and Northern Plains, had modest annual production increases (25 and 2 million bushels, respectively). The USDA projects national soybean yields of 50.5 bushels per acre, down 1.8% from 2021.
U.S. Soybean* Yields and 2021 vs 2022 Year over Year Change
U.S. Soybean* Production (in million bushels) and 2021 vs 2022 Year Over Year Change
Source: USDA Crop Production. Sept. 12, 2022. Complied by Northwest FCS.
*Selected 18 states account for 96% of soybean production in 2021.
U.S. Soybean Supply and Use
Source: World Agricultural Supply and Demand Estimates. Sept. 12, 2022.
Prices
Soybean prices are softening. The USDA’s forecasts the 2022-23 crop average price at $14.35 per bushel, $0.35 per bushel lower than July’s forecast. November soybean futures have been volatile, reaching highs of $15.82 per bushel in early June before falling more than $2.30 at the end of July. Futures prices have settled in the $13.75 to high $14 range since August.
Prices for soybean oil and soybean meal weakened during the summer, falling further from the historically high 2021-22 prices. Since July, soybean oil price projections fell by $0.05 to $0.69 per pound. The USDA forecasts soybean meal prices will be $390 per short ton, down 11.4% year over year. There is a silver lining for U.S. soybean growers. Even if prices for the 2022-23 crop decline to the most conservative estimate of $12.50 per bushel (Office of the Congressional Budget forecast), soybeans will be profitable.
International
The government of Argentina raised soybean exchange rates to 200 Argentina peso per U.S. dollar, a 60 peso per U.S. dollar increase. Their goal was to incentive farmers to sell soybeans in storage and replenish Argentina’s foreign currency reserves. The policy worked. Within the first week, Argentina’s soybean sales grew 7x to 2.1 million tons of soybeans (4.7% of the 2021-22 crop sold in a week).
September is planting season for Argentina and Brazil. The dry winter conditions are encouraging farmers to favor planting soybeans over corn. Although producers will not harvest the new crop until March, agronomists predict that South America will have a record soybean production. Once this new crop comes to market, U.S. soybean prices will face greater downward pressures. Softening prices may encourage producers to sell now instead of storing soybeans.
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FAQs
Global Soybean Supply Increases in MY 2024/25
A higher carryover raised the marketing year (MY) 2024/25 U.S. soybean ending stocks forecast by 10.0 million bushels to 455.0 million bushels.
Why are soybean prices going down? ›
Prices are falling due to increased production, suggested Roxanne Nikoro, market analyst for market intelligence firm Mintec. “The year-on-year (y-o-y) decline in soybean prices can be attributed to the anticipated large total South American crop this season.
How much is the soybean market worth? ›
The global soybean market size was estimated at USD 193.10 billion in 2023 and is anticipated to grow at a compound annual growth rate (CAGR) of 4.4% from 2024 to 2030. Soybeans are known for their health benefits, including being a good source of protein, fiber, vitamins, and minerals.
What will the price of soybeans be in 2024? ›
Corn ending stocks for 2024/25 are projected at 2.53 billion bushels, with soybeans at 435 million bushels. Corn stocks-to-use would be 17.2% and soybeans 9.9%. Neither stocks-to-use ratio is price friendly. USDA projected the 2024 national average corn price of $4.40 with soybeans at $11.20.
Should I sell my soybeans now? ›
Sell Soybeans Now
Soybean futures are incentivizing selling soybeans now rather than sometime in 2024. Selling soybeans “off the combine” is a consensus plan among market advisers, but only if growers are willing to maintain pricing flexibility.
What are the predictions for soybean prices? ›
Soybeans is expected to trade at 1183.16 USd/BU by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1120.76 in 12 months time. Soybeans Futures are available for Trading in The Chicago Board of Trade (CBOT® ).
Is it good to invest in soybeans? ›
Transparency Market Research predicts that the value of the global soybean market will grow from $146.23 billion to $215.746 billion between 2017 and 2025. As developing economies such as China grow wealthier, more and more people will likely increase their meat consumption and turn to healthier food.
What is the problem with soybeans? ›
Like many other intensive farms, soy farms not only harm the environment but also have numerous social impacts, especially on rural communities. While soybean production can boost economic growth, it can also increase income inequality and affect human health via water pollution and occupational hazards.
Why does China buy so many soybeans? ›
The dynamics of global soybean trade remain heavily influenced by China, which accounts for about 60% of worldwide soybean imports. China's soybean imports are driven by demand for animal protein and edible oils, two essential components of a diversifying Chinese diet that reflects rising living standards.
Who is the biggest buyer of soybeans? ›
Markets of Major Importers
China is by far the largest importer of soybeans in the world. It sourced 63% of its soybean imports from Brazil from 2018-2022. The US was the second largest supplier with almost 30%.
A 65-bushel yield for soybeans would require a price of $13.29 per bushel to break even. With November 2023 soybean futures trading at $13.81 per bushel, an expected yield of 65 bushels would result in a producer return of $34 per acre. A producer would need a yield of 63 bushels of soybeans to break even at $13.81.
Do soybean farmers make money? ›
Corn, soybeans account for more than half of the 2022 U.S. crop cash receipts. Crop cash receipts totaled $278.2 billion in calendar year 2022. Receipts from corn and soybeans accounted for $148.5 billion (53.4 percent) of the total.
What is the market outlook for soybeans? ›
The global soybean sector has experienced rapid growth in the past 5 decades and is now worth USD 155 billion. It is projected to reach USD 278 billion by 2031.
What is a soybean future? ›
Soybean futures are an easy, liquid tool for speculating or hedging against price movements for one of the world's most widely grown crops.
Why are soy prices rising? ›
For soybeans, USDA is estimating 220 million bushels (mb) of ending supplies in 2023-24. The ending stocks-to-use ratio is near 5%, the tightest inventory in eight years. During the past 25 years, a supply situation that tight would tend to result in prices 30% above the cost of production.
What is the outlook on soybeans? ›
The USDA's WASDE report pegged global 2024-25 soybean ending stocks at 128.5 million tonnes, up by 16.7 million tonnes from 111.78 million tonnes in the previous crop year and above the average market estimate of 124 million tonnes.
What is the outlook for soybean meal prices? ›
U.S. soybean meal exports are forecast at a record 16.5 million short tons while domestic meal demand grows 3.0 percent in 2024/25, compared to 2.7 percent in the prior marketing year. The soybean meal price is forecast down $60 per short ton from last marketing year to $320 per short ton for 2024/25.
What is the soybean oil price forecast? ›
The domestic consumption of soybean oil for MY 2023/24 and MY 2024/25 is lowered 200.0 million pounds and 100.0 million pounds, respectively, for food, feed, and other industrial use. The soybean oil price forecast for MY 2024/25 is unchanged at 42 cents per pounds, down 6 cents from MY 2023/24.
What is the crop market outlook for 2024? ›
In response to variable weather conditions across the globe, the 2024/25 coarse grains production forecast is lowered by 1.4 million to 1,511.2 million tons this month. This reduction is largely attributed to a lower barley output projection, partly offset by higher projected global corn output.
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