"Prices in the near term will likely be influenced by
developments in the general economy and the energy markets.
Recovery in those markets is not expected soon."
comments came as he reviewed the soybean market, where soybean
exports are strong but the soybean crush is slow.
For the 2008-09 marketing year, the USDA has projected that
U.S. soybean exports will reach 1.02 billion bushels, 141
million (12 percent) less than the record exports of a year ago.
The domestic soybean crush is projected at 1.745 billion
bushels, 56 million bushels (3.1 percent) less than crushed last
"Through the first 12.5 weeks of the marketing year, export
inspections for soybeans totaled an estimated 352 million
bushels, 40 million more than exported in the same period last
year," said Good. "The year-over-year increase reflects a faster
pace of imports by China. Those imports to date are 45 percent
larger than at the same time last year.
"Shipments to other significant importers, including the
European Union, Japan, Taiwan and Mexico are running behind the
pace of a year ago."
Unshipped export sales of soybeans as of Nov. 20 totaled 328
million bushels, 30 million less than outstanding sales of a
year earlier. Unshipped sales to China were about 48 million
bushels less than sales of a year ago.
For the year, the USDA projects that China will import 1.323
billion bushels of soybeans from all sources, 67 million less
than imported last year.
"The decline reflects a 103-million-bushel increase in
soybean production this year, as China is expected to consume 75
million bushels more of soybeans this year than were consumed
last year," said Good.
Good noted that while the pace of exports of U.S. soybeans to
date is encouraging, it may not be an accurate indicator of
export demand for the year. Last year, exports started slowly
and were stronger as the year progressed.
"Exports for this year were 45 million bushels larger than
during 2006-07, but exports during the first quarter were nearly
46 million less than during the previous year," he said. "The
pace of purchases by China, the development of the South
American crop and world economic conditions will be closely
monitored to evaluate export demand for the rest of the year."
While exports have started quickly, the pace of the domestic
crush is much slower than that of last year. Through the first
two months of the 2008-09 marketing year, the Census Bureau
estimates that the domestic crush totaled 275.5 bushels. That
total is 36.2 million bushels, or 13 percent, less than during
the first two months of the 2006-07 marketing year.
[to top of second column]
"The two-month total is the smallest in five years," said Good. "The
slowdown in crush reflects a continuation of the slowdown in soybean
meal consumption that began in May 2008.
"Apparent soybean oil consumption in September 2008 was less than
in the previous year, but consumption appears to have rebounded in
October as soybean oil prices declined sharply. Exports and export
sales of both soybean meal and soybean oil during the first eight
weeks of the marketing year were trailing the pace of a year ago."
Last year, he noted, the domestic crush was record-large in each
of the first three quarters of the marketing year but declined to a
three-year low in the fourth quarter.
"It appears that the pattern of domestic crush may be more
uniform this year," he said. "To reach the USDA's projection of
1.745 billion for the year, crush during the final 10 months of the
year will need to total nearly 1.47 billion bushels, only 20 million
less than during the same period last year.
"The monthly pace of the domestic crush, as well as livestock and
poultry inventories, will be monitored to judge domestic demand
potential for soybean meal for the rest of the year."
After the first of the year, Good added, more attention will
likely be given to any changes in acreage needed in the United
States in 2009.
"With a modest increase in consumption of U.S. soybeans in the
2009-10 marketing year and a return to trend yields in 2009, a small
reduction in soybean acreage is probably warranted," said Good.
"That assessment, however, could change as the South American
crop develops and as demand unfolds over the next four months."
[Text from file received
from the University
of Illinois College of Agricultural, Consumer and Environmental