The 2020 soybean season has been one for the history books.
In March, the USDA estimated Louisiana producers would increase soybean acres by 10% from 2019, for a total of 980,000 acres planted to soybean in 2020. Before the season could really get started, COVID-19 restrictions disrupted many operations. In addition, dry conditions in the south and wet conditions in the north slowed the planting progress in late March/early April.
However, the progress increased in mid-April, and 68% of the crop had been planted by May 10th. The planting progress during the optimum planting window was as high as 17% faster than in 2019. This efficiency did not remain after May 10th as persistent rains prevented planting and caused some acres to be replanted.
However, the LA soybean crop was 100% planted by June 21st, just ahead of the five-year average. In October, the USDA increased their estimate of acres planted to 1.05 million acres.
The soybean crop condition was good for most of the growing season. Producers and parish agents reported they were optimistic for high yields, and the USDA rated the LA crop at least 85% good -excellent from July 5th to August 23rd.
Hurricane Laura hit landfall on August 29th when the soybean crop was approximately 50% mature and 33% harvested. Parish agents estimated 13-16% of the crop was impacted, consisting mostly of light to heavy lodging. The economic impact was estimated to be approximately 1 to 1.5% yield reduction of pre-storm production. After Hurricane Laura, the crop rating dropped to 60% good – excellent.
In late September, Tropical Storm Beta dropped a lot of rain and delayed harvest in some areas. On October 9th, Hurricane Delta hit landfall closely following the path of Hurricane Laura. When Delta hit, approximately 94% of the crop was mature and 90% harvested. Once again, parish agents estimated flood and wind damage caused an approximate 1% yield reduction of total pre-storm production.
On October 18th, the USDA estimated 93% of the soybean crop had been harvested, equal to the five-year average. Furthermore, the harvested acre projection was 1.02 million acres with an estimated yield of 55 bu/A. The LA production forecast was 56.1 million bushels, up 36% from 2019.
Insect issues in soybean fields during 2020 were heavy across much of Louisiana. The winter of 2019-2020 was the second in a row of unseasonably warm temperatures that had very little impact on redbanded and native stink bugs.
Clover began to appear in late fall across the state and began to bloom in South and Central Louisiana in February. This early green up and bloom of clover allowed for large populations of redbanded stink bugs to migrate into soybeans once the clover senesced.
It was not uncommon for producers to make several applications for stink bugs (especially redbanded stink bugs) in 2020.
Caterpillar populations were also higher in 2020 than years previous. Corn earworm infestations in soybeans from R1 to R4 were common throughout the state. Fields near corn were infested with large numbers of earworms for extended periods of time.
Defoliating worms such as velvet bean caterpillars and soybean loopers were present in fields around Louisiana at economically damaging levels. According to several consultants, the level of defoliating worms in 2020 were higher than several previous decades.
Early in the season, southern blight and taproot decline were prevalent causing significant losses in some cases. Foliar diseases were not much of an issue until mid-season. Aerial blight, soybean rust, target spot, and Cercospora leaf blight were the major diseases impacting soybean in Louisiana. Hurricanes Laura and Delta provided conditions throughout the state that promoted disease development.
Many texts, phone calls, and farm visits indicated that Cercospora leaf blight was particularly bad across the state, and in some cases played a role in preventing fields from being harvested.
Green stem syndrome (influenced by variety, planting date, stinkbug pressure, disease pressure, and environmental stresses) was prevalent on some farms resulting in severe losses. Timely application of fungicides helped suppress diseases and preserved yield in some cases.
Rains during the harvest season have caused seed quality issues in some cases. Looking forward to next season, producers should rotate fields to corn, cotton, sugarcane, or grain sorghum.
In 2020, weedy grasses, especially barnyardgrass, prickly sida (teaweed), and glyphosate-resistant pigweed were the most common weed issues in Louisiana. Difficulty in managing these weeds was often associated with a program consisting of only postemergence application(s) of glyphosate plus dicamba (Engenia, FeXapan, Tavium, or XtendiMax) in Xtend soybean.
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Weedy grass control was reduced following glyphosate plus dicamba because of antagonism – meaning the dicamba prevented the glyphosate from preforming the way it should on weedy grasses. Neither glyphosate nor dicamba have ever provided excellent control of prickly sida, so control was quite poor following their application.
Control of glyphosate-resistant pigweed is highly influenced by the weed height at application, so dicamba applied to pigweeds bigger than 4-inches resulted in less than acceptable control.
An additional, unexpected, herbicide application was usually needed to manage these pests. Clethodim or Assure II was applied for grass control. One to two applications of glyphosate plus a PPO-inhibiting herbicide like fomesafen or glyphosate plus Classic was needed for prickly sida, but sometimes that did not provide desired control. Everything was thrown at glyphosate-resistant pigweed because no herbicide provides good control of a big pigweed.
Growers should plan to implement a program that includes a residual herbicide applied preemergence followed by a residual herbicide tank-mixed with their first postemergence application, usually 2-3 weeks after soybean emergence, to help manage weedy grasses, prickly sida, and glyphosate-resistant pigweed in 2021. Finally, above all, apply postemergence herbicides to weeds that are less than 3-inches tall.
Trade was the prominent theme dominating market news for the 2019/20 marketing year. That undertone continues to be persistent in the 2020/21 marketing year. The U.S/China Phase One agreement offers hope that U.S. soybeans would gain traction and displace Brazilian soybeans destined for China.
Ultimately, that may or may not be the case, as strong export competition from Brazil (combined with a weak Brazilian real) signaled a reduction in U.S. soybean market share in China. China, whose swine sector has been ravaged by African Swine Fever, is beginning to show signs of economic recovery with added calls for diversifying shipment sources for soybeans to meet growing feed demand.
As the 2020/21 marketing year progressed, soybean futures started to price in the smaller crop, additionally, export sales to China also helped to spur a rally for soybeans.
COVID-19 proved to be a major challenge for all sectors of both the U.S. and global economies. Logistical and governmental regulatory restrictions did affect agricultural supply chains. China bought cargoes of Brazilian soybeans for fall delivery, normally the peak U.S. shipping season to China. As the severity of the COVID-19 pandemic in Brazil continued to escalate, concerns about possible supply chains disruptions emerged in Brazil.
In October 2020, the USDA estimated the 2020/21 U.S. soybean crop at 4.268 billion bushels from 83.1 million acres sown. The estimated acres planted is down slightly from the March estimate of 83.5 million acres.
With strong export sales to China, the USDA raised its forecast of 2020/21 soybean exports to a record 2.2 billion bushels. The lower supply and higher export demand are forecast to reduce season-ending soybean stocks for 2020/21 by 170 million bushels to 290 million – a significant revision to the supply/demand balance sheet and supportive of soybean prices.
The fast pace of early-season U.S. soybean shipments reflects unimpeded harvesting efforts and a record volume of new-crop sales. The latter is due largely to a sharp increase for export sales to China.
The tighter outlook prompted the USDA to boost its forecast of the 2020/21 U.S. average farm price to $9.80 per bushel from $9.25 last month. This is the first-time near-term soybean futures have reached the $10.00 mark since early June 2018.
The dynamics behind the mid-August to mid-September price surge reflect a rebound in China purchases of U.S. soybeans and limited availability of exportable supplies in South America. Recovery of China’s pork industry from African Swine Fever has spurred imports by the Asian nation.
Recently, soybean futures are again finding support from strong Chinese demand and Brazilian planting delays. Prices have rallied about $1.75 since mid-August when the USDA initially began revising new crop bean production lower. If we go back to March and May, prices have gone up about 27%. The market has rallied from $8.30 per bushel to $10.50 more recently. Much of this occurred in the past month or two.
In a global perspective, the downsized U.S. crop and an increase for foreign use of soybeans in 2020/21 should continue to tighten global soybean stocks. For China, 2020/21 soybean imports are forecasted higher on account of strengthening demand.
Brazil has already begun planting their 2020/21 soybean crop. Progress is slow, however, due to a lack of rainfall. Dryness is unlikely to affect the soybean area sown in Brazil for 2020/21 but could delay the arrival of new-crop deliveries next year.
A likely extension of the country’s tight old-crop supply has swelled Brazilian price quotes (relative to Chicago futures) for 2021 shipments. This signals that U.S. exporters may shoulder the burden of supplying China with soybean imports well into next year.