ISA: Supplies could pressure soybean prices

     Soybean demand is stronger than ever and will continue to grow, but monster supplies – compounded by a record number of acres being planted in the United States – will be a drag on the market, according to today’s U.S. Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates Report.

     Analysts and farmers say record U.S. soybean crush, exports and dwindling ending stocks this marketing year could trigger price rallies if the weather significantly delays planting and crop emergence in major crop-producing states. However, record production in South America and a glut of beans worldwide overshadows robust demand, experts say.

     July soybeans closed on May 10 at $9.70 on the Chicago Board of Trade, down 4 cents from the opening bell but 15 cents higher than the average farm price projected by the USDA for the 2016/17 marketing year.

     “The soybean market has held up remarkably well,” said Rolland Schnell of Newton, Iowa Soybean Association president. “The domestic crush industry is healthy and exports are strong, which verifies that soybean checkoff programs to build demand are working.”

     The report projects 2016/17 U.S. soybean exports at 2.05 billion bushels, up 25 million from last month. Domestic crush is pegged at nearly 1.93 billion bushels, an increase of 15 million from April. Ending stocks for the 2016/17 marketing year dropped 10 million bushels to 435 million, according to the report.

     “Depending on the weather and if Brazilian farmers continue to hold back beans, there may be future marketing opportunities,” Schnell said.



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