U.S. soybean planted acreage in 2017/18 totaled an all-time high 89.5 million acres, virtually unchanged from farmers’ intended planting in March. With the soybean yield forecast unchanged, a higher estimate of harvested acreage edges up the 2017/18 soybean production forecast by 5 million bushels this month to 4.26 billion.
Coupled with an expected tightening of beginning stocks by 40 million bushels to 410 million, the season-ending stocks forecast is lowered this month by 35 million bushels to 460 million. A less burdensome soybean stocks outlook prompted USDA to raise its forecast of the 2017/18 average farm price by 10 cents to $8.40-$10.40 per bushel.
Soybean Planting Matches Spring Intentions
According to USDA’s Acreage report last month, U.S. soybean planted acreage in 2017/18 totaled an all-time high 89.5 million acres. Overall, this is virtually unchanged from farmers’ intended planting in March.
Bigger acreage gains were realized in Missouri, North Dakota, and Illinois, which were nearly offset by smaller than intended increases in Kansas, Iowa, Indiana, and Louisiana. U.S. harvested acreage is forecast up only 100,000 acres this month to 88.7 million acres.
A higher estimate of harvested acreage edges up the 2017/18 soybean production forecast by 5 million bushels this month to 4.26 billion. USDA’s soybean yield forecast is unchanged at 48 bushels per acre.
Although crop conditions are not as uniformly ideal as they were a year ago, as of July 9, 62 percent of soybeans were rated in good-to-excellent condition. Stress on this year’s soybean crop is most concentrated in North Dakota and South Dakota, where a drought has worsened. The 2 States account for 14 percent of U.S. soybean acreage. But crop development is still at an early stage.
Recovery is possible if rainfall resumes over the next 6-8 weeks when soybean pods are formed. So far, blooming has begun for 34 percent of U.S. acreage, slightly ahead of the 5-year average.
Strong Export Demand Limits Increase in Soybean Stocks
More change to the 2017/18 soybean supply is anticipated this month through the carryover of old-crop inventory. Season-ending soybean stocks for 2016/17 are seen tightening 40 million bushels from last month’s forecast to 410 million. USDA’s Grain Stocks report indicated that June 1 soybean stocks totaled 963.4 million bushels. This confirmed a new record in 2016/17 for soybean use in the third quarter.
March-May 2017 export demand (at 257.3 million bushels) was particularly robust. Export competition from Brazil and Argentina has been less brisk than previously anticipated. Now, even with fewer new U.S. export sales of soybeans being made, there are already enough outstanding sales to sustain a firm shipments pace throughout the final quarter of the crop year.
Thus, old-crop soybean exports are seen 50 million bushels higher this month to a record 2.1 billion. June soybean stocks were the third-highest ever and up 11 percent from a year earlier.
For 2017/18, a reduction in beginning stocks, coupled with a slightly higher crop, lowers the ending stocks forecast this month by 35 million bushels to 460 million.
A less burdensome soybean stocks outlook prompted USDA to raise its forecast of the 2017/18 average farm price by 10 cents to $8.40-$10.40 per bushel. The average new-crop soybean meal price is also forecast up $5 per short ton to $300-$340, versus $320 per ton for 2016/17.
In contrast, the forecast of the 2016/17 soybean crush is trimmed 10 million bushels this month to 1.9 billion, versus 1.886 billion for 2015/16. Compared to the year earlier pace, the cumulative September 2016-May 2017 crush (at 1.44 billion bushels) is up only 5 million bushels.
Domestic use and exports of soybean meal are not likely to meet previous forecasts and each are now expected 100,000 short tons lower (to 33.05 million and 11.9 million tons, respectively).
Domestic use of soybean oil is also lagging this year. Demand for soybean oil in the production of biodiesel has been displaced by a greater use of alternative feedstocks, particularly canola oil and distillers’ corn oil. USDA lowered its forecast of the 2016/17 use of soybean oil for biodiesel this month by 200 million pounds to 6 billion.
Sown Acreage Sets a New Peak for Canola as Sunflowerseed Contracts
U.S. farmers planted a record 2.2 million acres of canola for 2017/18, exceeding their March planting intentions by 234,000 acres. Most of the additional acreage occurred in North Dakota, where farmers sowed a record 1.7 million acres. In Montana and Oklahoma, canola acreage more than doubled this year.
The acreage expansion for canola could boost 2017/18 production to a record 3.6 billion pounds. While abundant canola supplies in 2017/18 may moderate U.S. imports, rising demand for oil and meal could swell the domestic crush to nearly 4.85 billion pounds from 4.4 billion in 2016/17.
Much of the acreage expansion for canola appears to have come at the expense of sunflowerseed and flaxseed, whose prices had deteriorated more acutely by this spring.
Sown acreage of sunflowerseed for 2017/18 declined 21 percent to 1.27 million acres and is the lowest area since 1976/77. Total sown acreage fell short of March intentions by 189,000 acres, principally due to reduced planting by North Dakota producers. Confection-type sunflowerseed acreage increased 4 percent to 186,000 acres, so oil-type varieties account for all of this year’s reduction in total acreage.
Similarly, the acreage sown to flaxseed this year declined 24 percent to 283,000 acres with an 85,000-acre reduction in North Dakota.
Peanut Supplies May Surge With a Fourth Consecutive Acreage Increase
Sown peanut acreage in 2017/18 surpassed farmers’ March intentions by climbing 9 percent to 1.8 million acres. Growers planted their third-highest peanut acreage ever and the highest since the 1991/92 record of 2.04 million acres. An even larger increase for harvested acreage is expected (15 percent) if last year’s high abandonment rate in Texas reverts to a more typical level this year.
Based on an expected trend yield of 3,638 pounds per acre, the 2017/18 peanut crop may approach 6.45 billion pounds. If realized, this year’s output would rank behind only the record 2012/13 harvest of 6.75 billion pounds.
In combination with beginning stocks that are expected to top 1.7 billion pounds, total supplies could be at an all-time high near 8.3 billion pounds. Such abundance will support domestic and export demand, but peanut stocks may again accumulate.