“World soybean production is expected to be record large in 2011-12 (0.5 percent larger than the 2010-11 crop), although the U.S. crop is just being planted and the South American crop will not be planted for several months. Soybean consumption in China is expected to increase by 8 percent, and world stocks are expected to decline modestly by the end of the 2011-12 marketing year,” he said.
Based on March planting intentions and a trend yield, the 2011 U.S. soybean crop is projected at 3.285 billion bushels, 44 million bushels smaller than the 2010 crop. Consumption is expected to be 15 million bushels less than during the current year, resulting in a 10-million-bushel year-over-year decline in year-ending stocks, Good said.
“The 2011-12 marketing year average price is projected in a range of $12.00 to $14.00, compared to an average of $11.40 for the current year,” he added.
Early projections of adequate U.S. and world supplies at current price levels resulted in price weakness following the release of the USDA report. “Now the market will monitor crop development to see if the projections materialize,” he said.