“Larger consumption would stem from lower prices and continued strong soybean demand from China,” Good said. “The weakest demand segment is expected to be soybean oil exports, resulting from continued high prices and from increased competition from South American soybean oil and from palm oil. That weakness is expected to be partially offset by an increase in domestic soybean oil consumption for biodiesel production. The 300-million-pound (6 percent) increase projected for that category, however, seems modest in light of the advanced biofuels mandate and the reinstatement of the biodiesel tax credit,” he said.
Year-ending stocks of U.S. soybeans are projected to increase from 125 million bushels this year to 250 million bushels next year. The average farm price is expected to decline from $14.30 per bushel to $10.50.
Good said that the early USDA projections for the 2013-14 marketing year are well reasoned and represent a useful starting point. “Our projections differ only slightly,” he said. “Larger year-ending stocks and a marketing-year average price near $4.50 for corn may result from a crop of 14.5 billion bushels. Producers appear to have been reluctant to take advantage of the high pre-harvest prices available early in the year. In contrast, our expectations would be for a slightly smaller soybean crop, stronger domestic soybean oil demand, and a marketing-year average farm price of soybeans near $11.00,” he said.