Supply Side Pressures Old & New Soybeans

ifr170317–058
Supply Side Pressures Old & New Soybeans
Todd Hubbs, Agricultural Economist - University of Illinois

The price of soybeans has been under pressure and, as Todd Gleason reports, this makes perfect sense to an agricultural economist from the University of Illinois.

When the United States Department of Agriculture…
1:51 radio
2:03 radio self-contained

When the United States Department of Agriculture released this month’s accounting of world soybean stocks, it didn’t surprise University of Illinois Agricultural Economist Todd Hubbs. It showed exactly what he’s been thinking about the soybean market.

Hubbs :37 …strong for soybean prices over the next few months.

I’ve been saying this for a few months now. I think a lot of people have felt this and that the price (of soybeans) hasn’t been reflecting it. On the one hand it is great because we locked in a very nice (crop insurance) price in February, but on-the-other-hand these beans are coming. It is going to put a lot of downward pressure on price. In particular, the March 31st Prospective Plantings report. I don’t know how much more weight we can put on this. It seems ridiculous. If we see a huge expansion of acreage in that report to soybeans then the downside is pretty strong for soybean prices over the next few months.

Hubbs says he has been budgeting in about 4 million extra acres of soybean in the United States this year. His estimate then is about 87.5 million acres. Anything above 89 million acres in the March 31 report he would consider huge.

Hubbs :31 …you could see a real shock to prices.

Quote Summary - That’s a lot of soybeans on top of what USDA says we are going to carryout at the end of this marketing year. So, any kind of normal yield year for U.S. soybean for the 2017/18 marketing year, there is going to be a lot of beans out there. If you’ve got old crop beans hanging around, then know that this March 31st Prospective Plantings report is coming and if it turns out the way a lot of observers think, you could see a real shock to prices.

USDA will release the Prospective Plantings report at 11am Friday, March 31st. If you’d like to read more from Todd Hubbs you may do that on the University of Illinois farmdocDaily website.