2019 20 SOYBEAN OUTLOOK 2019 Southern Region Outlook
2019 -20 SOYBEAN OUTLOOK 2019 Southern Region Outlook Conference September 24, 2019 Todd D. Davis Assistant Extension Professor
Outline • Weather • Planted area – what is going on? • Crop progress and condition • Soybean outlook • Risk management opportunities for stored grain and 2020 crops • Budgeted Returns • Potential ending stocks and price
Comparison of NASS and FSA Acres for 12 Major Crops
Soybean Dropping Leaves (September 22, 2019)
Soybean Condition: 2018 vs. 2019 (Sep 22, 2019)
Similar Yields in 3 countries 2018: 49. 5 (ARG) 48. 5 (BRA) 51. 6 (USA US Trend = 0. 59 bu/acre/year Brazil Trend = 0. 57 bu/acre/year Argentina = 0. 37 bu/acre/year 2019 = 47. 9 is 2. 7% below trend
Calculated Aug 24, 2019
Calculated Aug 24, 2019
China: -862 mil bu. ROW: + 529 mil bu. Pie shrunk by 333 Mil bu. Calculated Aug 24, 2019
US Days of Soybean Stocks
U. S. and World Soybean Ending Stocks
Soybean Storage to February 2020 Risk Management Opportunities
2020 Soybeans Pre-Harvest Risk Management
2020 Soybeans Pre-Harvest Risk Management (Double-Crop)
Hitting the Top 1/3 (and Avoiding the Bottom 1/3) for November Soybean Futures
2020 Western Kentucky Crop Projected Returns
3, 633 13 years / 30 Avg = - 128 mil bu 17 years / 30 Avg = +194 mil bu
2019 -20 U. S. Soybean Production/Stocks 3. 5 bil is implied 1993
Potential U. S. Soybean Stocks/Use and U. S. Marketing Year Average Price
Soybean Stocks-to-Use Recent History 2009 -13 = 4. 7% 2014 -18 = 10. 1%
What if…. • Spread sheet quick calculations, if achieve 2020 trend yield of 50 -bu and Total Use of 4 billion bushels, Planted area would have to decline by another 0. 96 million acres to get a 10% stocks-to-use (2020 planted area = 75. 7 mil) • To get to a 6% stocks-to-use, planted area would have to be -4. 2 million acres below 2019 planted area (72. 49 mil) • No (legal) crop has profit potential to keep soybean area reduced. 2020 will likely increase stocks. • South America production problems would be helpful
Summary and Conclusions • Weather market running out of steam. Early frost may be last chance to damage crop. • Acreage uncertainty until ? . • Any rally may not happen until late 2019 or winter 2020 but not likely to help those selling at harvest • Soybeans really needs the reduced acreage. A below- trend yield is bitter medicine that will help cure the excess stocks. For one year until production rebounds in 2020
- Slides: 26
