Soybean Fundamentals

Soybean Stocks on the Rise at the World Level But Dropping Back in U.S.

Ending Stocks of Soybeans Relative to Total Use

Soybeans Price at Risk?

	2004	2005
Planted	75.2	73.3
Harvested	74.0	72.4
Yield	42.5	39.9
Beg Stocks	112	290
Production	3,141	2,890
Imports	5	3
Supply	3,258	3,183
Domestic	1,859	1,838
Exports	1,110	1,135
Use	2,969	2,973
End Stk	290	210
S/U	9.8%	6.9%
US Price	5.80	5.10-6.10

Average Oct. Price Nov. Futures vs. USDA’s Oct. S/U Estimate for Soybeans

Source: USDA 7/05

August critical for soy price outlook
A much better picture of soybean market direction will be known in September, as the critical pod fill stage passes and yield/production can be better assessed. Supply/demand fundamentals combined with a new crop that comes less-than-expected could provide short-term price support, but bear in mind that South American beans become a factor later in the marketing year, with production that can bear down on U.S. prices. Chicago Nov soybean futures have downside risk to the low $5 range, but upside as well, depending on weather.  Take advantage of prices around $7 .50 Nov futures for additional sales, advises NDSU extension crops economist George Flaskerud.  Limit contracts to crop insurance-guaranteed yield, and consider buying puts on the balance.  As well, consider soybean elevator contracts for ’06 beans if cash prices climb to $6.50 or better.

Competition From Brazil Continues