UIUC Weekly Outlook: Evaluating Consumption Projections

U.S. soybean exports are projected at 1.345 billion bushels, equal to last month’s projection and only 17 million less than was exported last year. Exports during the first 23 weeks of the year (adjusted by Census Bureau estimates through December) totaled 1.05 billion bushels, an average of 45.9 million per week. Good said that shipments during the remainder of the year need to average only 10.1 million per week to reach the USDA projection. Only about 50 million bushels of new sales are needed to reach total sales of 1.345 billion bushels, although some existing sales may be canceled or rolled into the 2013-14 marketing year.

“Taken together, the likely pace of corn consumption appears large enough to meet, or perhaps slightly exceed, the USDA projection,” Good said. “For soybeans, all available supplies will be consumed by year-end. USDA projections, however, may understate the demand for soybean oil to meet the likely level of biodiesel production. Old-crop corn and soybean demand appears strong enough to provide price support near current levels, with the largest risk of lower prices coming from growing confidence in large U.S. crops this year,” Good said.