Tags: Commodity Market, Food Market
soybean

The U.S. soybean prices are expected to soar in 2021

The U.S. soybean prices will soar in 2021, as the export optimism increases on robust China demand.

The S&P Global Platts Analytics forecast the average farm price of U.S. soybeans in 2020-21 marketing year (September–August) at $10/bushel, up 17% on the year.

Significantly, the U.S. Department of Agriculture’s latest World Agricultural Supply and Demand Estimate report was more bullish at $10.55/bu, up 23%.

According to USDA, the projected rise in soybeans prices is mostly due to the larger export volume they anticipate in 2020-21. The exports might become 59.87 million mt, up 31% year on year.

Furthermore, as of December 10, USDA’s weekly export data cumulative total export sales for 2020-21 U.S. soybeans held at 53.8 million mt. In contrast, in 2019-20, it stood at 18.8 million mt.

Soybean exports forecast for 2020-21 will rise. Subsequently, in the upcoming World Agricultural Supply and Demand Estimates amid stronger than anticipated export sales.

Moreover, the U.S. soybean farmers have already sold 89.9% of the total 2020-21 projected exports. It was traded between September 1 and December 10. Significantly, the 5-year average pace of sales for the same period is 66.6%.

Furthermore, the CBOT soybeans futures prices closed above the $12/bu benchmark on December 17 for the first time since June 2014.

The USDA has anticipated 17% higher year-on-year beans production

If we believe agricultural analysts, the recent increase in soybean prices is sustainable in 2021. It is a demand-driven push, which tends to be resilient.

Although the forecast for supply in 2020-21 is high, the U.S. soybean prices are likely to be stable. It will get support from increasing domestic crushing and lower ending stocks in 2021.

The United States Department of Agriculture has forecast 17% higher year-on-year beans production of 113.5 million mt in 2020-21.

WASDE announced that the U.S. soybean carryout is forecast at a seven-year low of 4.76 million mt for 2020-21 because of higher crush usage.

Furthermore, the USDA has boosted its projection. The 2020-21 average soybean meal price will increase by $70 on the previous year to $370/mt. The average soybean oil price was 6.35 cents higher at 36 cents/lb.

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