 "Since the first of October, November 2011 soybean futures have
traded in a range of $1.20, with a high of $12.72," reported
University of Illinois agricultural economist Darrel Good. "The
price of that contract is currently about in the middle of the
recent trading range and $2.50 below the contract high reached on
Aug. 31."Good said early forecasts of another large South
American soybean harvest in 2012, partially due to generally
favorable weather conditions in Brazil and Argentina in the early
part of the planting and growing season, are one reason for the
declining price.
"A slow start to the 2011-12 marketing year, domestic soybean
crush and lagging soybean oil export sales have also contributed to
the negative tone," Good said. "In addition, concerns about world
economic and financial conditions have cast a shadow over the future
demand for soybeans. The USDA’s forecast of the size of the 2011
U.S. harvest increased by 29 million bushels in September, but the
October forecast was back near the August forecast."
Expectations about the November yield forecast are mixed, with
the average reported expectation near the October forecast of 41.5
bushels. The forecast will be released on Wednesday, with the final
estimate of crop size due to be released on Jan. 12, 2012.
"Another major negative factor for the soybean market has been
the perception that export demand for U.S. soybeans is weak," Good
said.
"The USDA currently forecasts 2011-12 marketing year U.S. soybean
exports at 1.375 billion bushels. That is 40 million bushels below
the September forecast and 125 million bushels below the record
level of exports in 2009-10 and 2010-11. The current pace of exports
and export sales are certainly much slower than that of last year."
Good reported that through the first nine weeks of the current
marketing year, soybean export inspections totaled 257 million
bushels, compared with 393 million bushels during the same period
last year. Unshipped export sales of soybeans as of Oct. 27 stood at
484.3 million bushels, compared with 752.2 million on the same date
last year. Export commitments are lower for all major destinations
except Mexico.
"Comparison of the pace of exports and export sales this year to
those of last year may not be appropriate for judging the strength
of export demand," Good said.
Last year, export business was concentrated in the early part of
the marketing year. Exports during the first quarter of the year
accounted for 41.2 percent of the marketing year total. In the
previous five years, the average was 32 percent. Exports in the
first half of the year accounted for 78 percent of the total. That
is similar to the total for the 2009-10 marketing year, but compares
with a more typical 67 percent in the period 2005-06 through
2008-09. Last year, export commitments (shipments plus outstanding
sales) in late October accounted for nearly 71 percent of marketing
year exports.
"China was a very aggressive buyer early in the marketing year,"
Good added.
[to top of second column]
 |
In the previous five years, export commitments in late October
accounted for an average of 44.4 percent of marketing year exports,
in a range of 57.5 percent (2009-10) to 37.7 percent (2005-06). This
year, export commitments as of Oct. 27 represented 49.5 percent of
the current USDA projection of marketing year exports. Except for
the past two years, commitments represent the largest percentage of
actual marketing year exports since 1997-98. Commitments are 23
percent larger than at this time in 2008-09, when marketing year
exports totaled 1.279 billion bushels.
"There may be reasons to be concerned about soybean export
demand, but the current magnitude of sales does not appear to be
particularly troublesome," Good said. "The recent pace of sales,
however, has been very low."
Good said to reach the USDA projection for the year, new sales
will need to average 15.5 million bushels per week from November
2011 through August 2012. For the two weeks ended Oct. 27, new sales
averaged only 8 million bushels per week. The pace of new sales and
weekly shipments need to be followed closely to gauge the potential
for marketing year exports. In addition, the monthly Census Bureau
export estimates should be monitored, as those are the official
export estimates. The estimate of September 2011 exports will be
released on Thursday.
"Typically, the difference between the USDA export inspection
estimates and the Census Bureau estimates are small early in the
year," Good said. "In recent years, however, that difference has
often become larger later in the marketing year."
Good said that by the end of the year, Census Bureau estimates
were about 40 million bushels larger than USDA inspection estimates
in the three years from 2007-08 through 2009-10. Last year, Census
Bureau estimates for the year exceeded export inspections by only 14
million bushels.
On Wednesday the USDA will release new forecasts of U.S. and
world soybean production and consumption for the current marketing
year.
"The market appears to be expecting the forecast of U.S.
marketing year exports to be below the October forecast," Good said.
"A smaller forecast seems premature based on the current status of
sales and shipments."
[Text from file received
from the University
of Illinois College of Agricultural, Consumer and Environmental
Sciences]
 |
