Soybean price pushed by usage, demand

A soybean market analyst says U.S. soybeans are in high demand. Since August, the U.S. soybean crop size has dropped by about 300 million bushels, said Mac Marshall, Vice President for Market Intelligence at the U.S. Soybean Export Council (USSEC), reacting to USDA’s World Agriculture Supply and Demand Estimates. That, said Marshall, is an historically large crop, but the change is significant.

“The magnitude of the drop in projected ending stocks has been even larger, just under 500 million bushels, reflecting continued overall demand strength for U.S. soy,” said Marshall, during a USSEC-sponsored webinar, following release of the USDA report.

Meanwhile, commodity analyst Michael Liautaud, Manager of Education and Research at Commodity and Ingredient Hedging, compared the current market to the soybean price spike in August of 2012, when the price was driven by drought.

“Today everyone isn’t really in a rush to buy, and so you see this slow, steady, relatively speaking, slow, steady progression higher in price,” Liautaud told the webinar audience, “and so we’ve gotten here different ways, but we have been here before and prices are economically justified.”

Marshall further points out differences in the two scenarios, telling Brownfield that while the runup almost nine years ago was driven primarily by dry weather, which is partly the case with the latest rally, however he says early 20/21 marketing year sales and usage are high.

“Crush is running at an all-time high, at least in the early stage of the year,” Marshall told Brownfield Ag News during a follow-up interview Wednesday, “so it’s a lot of really aggressive forward selling, which was not necessarily the case back in 12/13. There was a little more of a wait-and-see approach.”

AUDIO: Mac Marshall
AUDIO: Story on the WASDE report

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