Milling & Baking News - August 25, 2020 - 47

Ingredient Market Trends
US soybean yields

Strong sales to China help
bolster soybean prices

Analysts expect ongoing strong soybean sales to China and possibly yieldreducing dry conditions in parts of the
*
western Corn Belt to support soybean
48
prices despite the US Department of Agriculture's forecast for the second-largest
42
crop ever and a record-high national average yield.
36
The USDA, in its first survey-based
soybean report of the season on Aug. 12,
forecast US soybean production in 2020
30
2000
2005
2010
2015
2020
at 4,425 million bus, up 25% from 2019
Source: US Department of Agriculture
*forecast
and the second highest on record after
4,428 million bus in 2018. If realized, it
Indexes
would be the fourth
time in five years that
Saltine Cracker Ingredients
US soybean produc190
tion has topped 4 billion bus, with only the
170
2019 crop below that
mark. Average soybean
yield was forecast at a
150
record-high 53.3 bus
an acre, up 12% from
130
last year and topping
the 2016 record yield
110
of 51.9 bus an acre by
2.7%. The USDA proBagel Ingredients
duction forecast was
below the pre-report
200
average trade estimate,
but the yield forecast
180
was above the trade average.
Millions of acres of soybeans were af160
fected by the Aug. 10 derecho storm that
blew through the Midwest. But dam140
age to lower-growing soybeans was expected to be less than to the corn crop.
The storm damaged 5.82 million acres
120
of soybeans in the top soybean growing
state of Illinois and 5.64 million acres of
Price Indicators
soybeans in No. 2 Iowa.
2
3
The developing drought in eastern
THIS LAST WEEKS WEEKS
Nebraska
and western Iowa was being
WEEK WEEK AGO AGO
watched for its impact on soybeans.
Pan-bread flour
Paul Meyers, vice-president of comWheat futures,
modity analysis, Foresight Commodity
K.C., Sept.
Services, Inc., suggested soybeans could
Hard winter
lose about 1.5 bus from the USDA forepremiums,
cast average yield, "but it still will be a
12.2% protein
huge crop," he added.
Millfeed, K.C.,
Currently, the driving force in the soy30-day
bean market was sales to China.
Soybean oil
China's rapid recovery from the coroCane sugar
navirus, along with strong growth in
Cocoa
poultry (forecast up 8% in 2020 after
bus per acre

47 / November/7,world-grain.com
2017
Milling & Baking News
bakingbusiness.com

gaining 18% in 2019) and pork (pig herd
in July up 13% from July 2019) production, should continue to increase demand for soybeans (with soybean meal
a primary livestock feed protein source)
and corn.
The USDA, in its Aug. 12 World Agricultural Supply and Demand Estimates
report, forecast 2020-21 soybean exports
at 2,125 million bus, up 75 million bus
from its July forecast and up 475 million
bus, or 29%, from 1,650 million bus expected in 2019-20, which ends Aug. 31.
Brian Harris, executive director and

©JJ GOUIN - STOCK.ADOBE.COM

Weekly Spotlight

owner of Global Risk Management, said
he believed the USDA's soybean export
forecast was low "given current forward
sales from Brazil and China's likely appetite going forward, despite all of the
negative rhetoric between the United
States and China." He forecast 2020-21
US soybean exports at 2,300 million bus,
about 175 million bus above the current
USDA forecast.
Brazil was expected to produce another record-large soybean crop next year,
which will continue to compete with US
supplies for sales to China.
Soybean futures have posted solid
gains since the Aug. 12 USDA reports.
New-crop November closed at a multimonth high of $9.15¼ a bu on Aug. 17,
up 42¢, or 5%, from a week earlier.
Views were mixed on prices. Mr. Harris expects November soybeans to firm
to around $9.25 a bu in November, while
Mr. Meyers expects prices will weaken
to around $8.70 a bu. MBN
bakingbusiness.com
/ world-grain.com
Milling & Baking
News
August
25, 2020 / 47

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Milling & Baking News - August 25, 2020

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