Since its first forecast of a record-large soybean crop, the first to top 4 billion bushels, the USDA has twice boosted its estimated size of the crop, now pegged at 4.269 billion bushels. Economist Darrel Good of U-Illinois says history suggests the estimate will keep climbing as the harvest progresses and production data become more precise.
Writing at farmdoc Daily, Good says in 12 of the past 40 years USDA raised its estimate of soybean yields per acre in September and October, like this year. In 11 of those 12 years, USDA forecast a still-higher yield in November, by an average 0.7 bushels. And in seven of those 11 years, USDA’s final estimate of yield, released in January, went up again. “History points to a November U.S soybean production forecast that is 20 to 90 million bushels above the October forecast,” says Good.
Soybean production in South America is expected to recover this marketing year from bad weather in the previous year. If it does, any increase in U.S. production will mean a larger U.S. soybean stockpile. So-called carry-over supplies are expected to double this year and U.S. growers are likely to plant a record amount of soybean land next year. “There are a lot of moving parts to the soybean price picture with the potential for a wide trading range,” said Good. The USDA says the season-average price paid to farmers for this year’s crop will be the second-lowest in 10 years.