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May 13, 2021

Soybeans Hit 9-Year High

Economic recovery from pandemic is driving demand for ag goods, leading to tight stocks

WASDE Quick Recap - Outlooks for 2021/22 Released

  • USDA sees bigger crops for corn, soybeans, and wheat.

  • The US is seen losing export share for wheat, corn, and soybean exports.

  • Brazil is expected to produce a massive soybean crop.

  • Global wheat production is seen at a record with ending stocks seen flat.

  • Global corn stocks are seen rising thanks to larger output.

  • World soybean production is seen at a record with ending stocks increasing.

  • But, global use is forecast to continue to rise.

  • US cotton production is projected to increase by 2.4 million bales to 17.0 million bales, but total supply is projected at its lowest in 5 years.

FBN’s Take On What It Means: The updates offered few surprises. Record crops were the theme which is not too surprising given the price environment. The projected carryouts for both corn and beans are forecast to rise, but still remain at relatively tight levels. Winter wheat markets could struggle with Russia set to have a massive crop and large stocks.

FBN
FBN

Soybeans Hit 9-Year High

  • Nearby soybean futures are trading above $16 for the first time since 2012 as stocks continue to tighten.

  • The record high of $17.89 was also set that year as drought conditions cut US production.

  • China’s expanding hog herds need soybean meal, and their imports are forecast to increase 3 million tonnes to 103 million.

  • In the US, the renewable diesel mandate could also have a significant impact on demand for bean oil.

  • Soy crush for 2021/22 is projected at 2,200 million bushels, up 35 million from this year, reflecting favorable crush margins.

  • Global vegetable oil ending stocks are projected at 22.4 million tons, down 3% from 2020/21 and the lowest in 11 years.

FBN’s Take On What It Means: The economic recovery from the pandemic is driving demand for agricultural goods generally, leading to tight stocks. The supply situation for beans is forecast to remain tight for a second consecutive season, even with trend yields. This leaves little room for any production problem during the growing season, and this risk should continue to support bean prices.

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Kevin McNew

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Magazine

Marketwatch: Dec, 04

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.6684
high: 5.7321
low: 5.6559
close: 5.7046

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 12.266
high: 12.366
low: 12.2585
close: 12.34

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.1277
high: 8.243
low: 7.9921
close: 8.0144

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.6225
high: 7.7249
low: 7.4749
close: 7.5391