Soybean Production and Consumption Uncertainty

Acreage drives supply

The other factor driving supply is acreage.

The uncertainty on this point rests with the Farm Service Agency (FSA) estimate of planted acreage for those producers participating in federal programs.  That FSA estimate is 1.375 million acres (1.8%) less than the current National Agricultural Statistics Service (NASS) estimate of planted acreage. It compares to a difference of 1.086 million (1.4%), in 2010 and 1.045 million (1.3%) in 2009.  The larger difference suggests the NASS October estimate of planted acreage could be reduced by 340,000-350,000 acres.

The USDA stocks and crop production forecasts will set the supply stage for the coming fiscal year. The trade will then turn to the pace of soybean consumption. Weekly USDA data will provide a steady flow of export information, but the monthly Census Bureau domestic soybean crush estimate along with estimates of soybean meal and oil production and stocks will be missing. These reports were terminated in a budget-cutting exercise.  The National Oilseed Processors Association provides an alternate monthly estimate for its membership.

Good notes that not all of the soybean crush capacity is represented by members of that association.  “The lack of monthly information comes at a time of tight supplies when more information, not less, is needed,” he says.  

The lacking Census data will result in more uncertainty about the pace of consumption and will put more focus on USDA’s quarterly estimates of soybean stocks.