By DOUG SCHMITZ
CHESTERFIELD. Mo. – While U.S. soybean usage is up, global demand for a big new crop is as well, as the nation’s growers look to plant a huge 2023 crop as stocks tighten, according to the U.S. Soybean Export Council.
“The dedication and resiliency of U.S. soy farmers will deliver what the world needs to supply customers,” said Jim Sutter, U.S. Soybean Export Council CEO. “We are committed to meeting the needs of customers in terms of output, but want to continue to innovate to ensure U.S. soy remains the most reliable, high-quality, sustainable soy.”
According to the USDA’s March 31 Prospective Plantings Report, U.S. farmers are forecast to plant 87.5 million acres, up just slightly from last year.
“If the prospective plantings for soybeans of 87.5 million acres is realized, soybean area would be almost unchanged in 2023 from 2022,” said Scott Gerlt, American Soybean Association chief economist. “However, 2022 had a below-trend yield of 49.5 bushels per harvested acre. A return to trend of 51.6 bushels per acre has the potential to produce a record crop in the US.”
In 15 of 29 soybean growing states, planted acreage intentions are up, or unchanged, the USDA said. And if realized, the planted area in Illinois, Nebraska, New York, Ohio, and Wisconsin, would be the largest on record.
But Gerlt said farmers base planting decisions on many factors such as crop rotations, weather, and prices.
“Tight stocks only matter in producers’ planting decisions through their effect on prices offered to farmers,” he said. “The market this spring has been bidding for corn acres. The U.S. soybean stock situation is fairly tight this year, but Brazil’s record soybean crop is muting some of the price effects, as its prices are heavily discounted.”
He said domestic stock levels have become less important with the two soybean crops-per-year cycle that arose with South America’s entry into international soybean markets.
Currently, he said, Argentina’s 17 million metric ton drop in soybean production, compared to last year, has left the world with fewer soybeans than originally expected.
“However, Brazil’s 23.5 million metric tons year-over-year increase has more than offset this drop and has resulted in plenty of beans, even if fewer than expected,” he said. “Brazil is expected to increase production again next year.”
Looking to the demand side, he said China’s domestic needs have been difficult to judge.
“African swine fever has picked up within the Asian country,” he said. “Markets will continue to allocate supplies to their highest value uses.”
Ankush Bhandari, vice president of economic research for Viterra, U.S. & Mexico, said the need for a large soybean crop was emphasized by higher-than-expected usage, adding that the average guess among traders pegged soybean stocks at 1.74 billion bushels; whereas, the USDA reported 1.68 billion bushels.
He said supplies for the old crop in 2022 remain very tight; however, he pointed to “potential tailwinds this summer on crush and margins if the U.S. started exporting additional meal.”
“The renewable diesel situation is here, and will continue to change the landscape not only for corn and soybean area, but production and flows going forward,” he said. “This is something everybody needs to watch, not just for the next three months, but for the next five years as these plants (crush and renewable diesel) come online.”