The 2014 soybean crop is one for the record books, according to the final official estimates released by USDA on Monday of this week. USDA's final 2014 Crop Production report and USDA's World Agricultural Supply & Demand Estimates (WASDE) report are considered by traders as some of the most important assessments of the year. Both reports were released Monday and they were "neutral" to soybeans—according to market analysts.
Grant Kimberley, Iowa Soybean Association market development director, says despite record highs set for soybean production in the U.S. in 2014, in both yield and harvested acres, a new milestone is likely for soybean exports during the 2014/15 marketing year and domestic consumption of soybeans here in the U.S. is also up. "We have off-the-chart record production in the U.S. and good global supplies, but there's also great demand," says Kimberley, who also farms in central Iowa. "There is a strong appetite for soybeans and it continues to grow."
U.S. farmers harvested even more soybeans than expected
The nation's 2014 soybean harvest is pegged at 3.97 billion bushels, up 11 million bushels from November estimates and 18% higher than 2013. The average yield is estimated at 47.8 bushels per acre, up .3 bushels from the November 2014 estimate. Farmers in the U.S. harvested a whopping 83.1 million acres of soybeans, up 300,000 acres from the previous forecast and 9% more acres than was harvested 2013.
Iowa farmers harvested a little more than 9.8 million acres of soybeans in 2014, says USDA. Production is estimated at nearly 506 million bushels, with an average yield of 51.5 bushels per acre.
The small increase in national production is offset by demand, according to USDA analysts. Soybean ending stocks projected by USDA for the 2014/15 marketing year, which ends August 31, 2015, remained unchanged from last month at 410 million bushels, according to government estimates.
Soybean exports for 2014 crop are projected to be a record
Soybean exports were increased 10 million bushels to a record 1.77 billion bushels reflecting record sales during the first quarter of the 2014-15 marketing year, the WASDE Report said. Soybean meal balance sheet changes include increased imports and increased domestic consumption.
China continues to lead the charge as the world's largest soybean buyer. As of late last week, that nation has purchased 27 million metric tons— or more than 992 million bushels of U.S. soybeans, which is 63% of all U.S. exports. Kimberley says soybean meal exports are strong as well, especially to Mexico, Thailand, the Philippines and other Pacific Rim nations. "The world wants more protein," he notes.
Oilseed consultant John Baize of Falls Church, Va. considers the January 12 USDA report bearish for the soybean sector. "Analysts were expecting USDA to slightly reduce its estimate for the U.S. soybean crop and to reduce ending stocks below 400 million bushels," Baize says. "In addition, the USDA raised its forecast for Brazil's 2015 soybean crop by 1.5 million metric tons to 95.5 million metric tons. While the changes were relatively minor, the net effect caused the soybean market to fall."
Soybean prices haven't dropped as sharply as corn prices
The 2014/15 U.S. season-average farm price for soybeans is projected at $9.45 to $10.95 per bushel, up 20 cents at the midpoint based on prices reported to date, according to USDA.
Even though soybean prices are lower than in previous years, they haven't dropped as dramatically as corn. A recent survey by Farm Futures magazine indicates U.S. farmers intend to expand soybean plantings by nearly 5% to 88.3 million acres in 2015.
"Planting decisions are looming large in farmers' minds and it is encouraging to see soybean demand keeping up with production in this report," says Tom Oswald, ISA president who farms near Cleghorn in northwest Iowa. "We will now focus our attention to the South American soybean harvest which will begin in February and March, as we prepare to make final 2015 planting decisions here in the U.S."
Corn estimate is reduced, but it is still a record U.S. corn crop
USDA also cut its forecast for the size of the 2014 U.S. corn crop. Production during 2014 is now estimated at 14.216 billion bushels, down from 14.407 billion previously estimated by USDA and less than what market watchers had forecast. The government reduced the U.S. corn yield to 171 bushels per acre, down from 173.4 bushels per acre.
USDA says ending corn stocks at the end of the 2014-15 marketing year this coming August 31 will likely total 1.877 billion bushels, down from the 1.998 billion bushels predicted last month. Corn prices rose following the release of Monday's final crop report, with March corn futures rising to $4.02 on the Chicago Board of Trade.