2011 Crop Prospects - Soybeans
Soybean stocks to remain tight as well.
John Otte
Published: Feb 24, 2011
Soybean planted acreage is forecast at 78 million acres due to strong prices and increased double-cropping opportunities compared to last year. Assuming trend yields and harvested acreage of 77.1 million acres, production is estimated at 3.345 billion bushels. With a carryin of 140 million bushels and imports forecast at 15 million bushels, total supplies for 2011-12 are forecast at 3.5 billion bushels, about 5 million bushels more than total supplies for 2010-11. Domestic use is estimated to be 1.765 billion bushels, unchanged from 2010-11. Exports, are forecast at 1.575 billion bushels, and, while down from this year's record 1.59 billion bushels, would be the second largest on record.
"One out of every four soybean rows planted in the United States is currently exported to China. That is expected to continue in 2011-12," Joe Glauber, USDA's chief economist told more than 2,000 participants attending USDA's annual Outlook Forum Thursday morning. "That's despite U.S. exports facing renewed competition from South American exports from Brazil and Argentina."
Total use for 2011-12 is estimated to be 3.34 billion bushels, down 15 million bushels from the current year. Ending stocks are estimated to climb by 20 million bushels to 160 million bushels, the highest level of carryout since the 2007-08 marketing year. However, given the rise in use since 2007-08, the stocks-to-use ratio is still estimated to be below 5%, indicating a tight market.
USDA projects the season average price to be $13.00 per bushel, a record.
Tax credit restoration to help biodiesel
With the restoration of the $1 per gallon biodiesel tax credit on Jan. 1, 2011, Glauber expects biodiesel production to rise. Mandates under the Renewable Fuel Standard call for 800 million gallons produced in 2011 and 1 billion gallons produced in 2012. Assuming that about half of the biodiesel production is from soybean oil, it is forecast that 3.350 billion pounds of soybean oil will be used for methyl ester production in 2011-12 compared to 2.9 billion pounds used in 2010-11.
Renewed demand for biodiesel, may well result in soybean oil exports falling to 1.9 billion pounds, the lowest level since 2006-07. Strong domestic and foreign demand for soybean oil should keep prices high with a forecasted price for 2011-12 of 56.5 cents per pound.
Soybean meal demand remains relatively flat reflecting stable total meat production over the past few years. Prices are estimated to remain high at $360-short ton. This will keep feed costs high and margins narrow for livestock producers.
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Tagged: soybean, biodiesel, usda, Bushel, livestock producers
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