The Department of Agriculture’s June 30 Acreage and Grain Stocks reports show less planted acres of soybeans than expected. Mac Marshall, United Soybean Board and U.S. Soybean Export Council Vice President of Market Intelligence, says wet weather and high input costs played a role this spring.
“If you assume trend yield, it’s like we’re taking about 130 million bushels of production off the balance sheet. It still puts us at a potential record crop if everything unfolds well over the balance of the growing season of 4.5 billion bushels, but seeing that cut there at a time when the world is really looking for more and more soy is interesting for sure. We also have to consider the grain stock side of things which was showing 26 percent increase in June 1 inventories relative to June 1 2021. Of course, also if you reconcile the inventories for June 1 ‘22 relative to March, we are looking at quarterly disappearance of 960 million bushels which is a record for that March through May quarter.”
That disappearance Marshall speaks of implies demand for U.S. soy remains strong, but high input costs impacted farmers planting decisions.
“Overall, strength in demand certainly from export channels and from domestic crush as you see encapsulated into that quarterly disappearance figure, and with that reduction in area, you know, I think it’s partially a reflection of getting off to a wet start, and then collectively with input costs really surging across the board, total crop acreage for both corn and soy combined and for the eight major row crops down relative to 2021.”
Marshall adds the data supports a strong pricing environment for soybean farmers.
“The pricing position that farmers are going to have to sell into for new crops remain strong. But, of course, I think we’re really seeing the impact of margin compression from higher input costs and playing a role in some of the reduced area figures that we’re seeing here, certainly for soy.”
Keep up with the latest news from the United Soybean Board at unitedsoybean.org and Wednesday mornings at 10 a.m. Eastern / 9 a.m. Central on RFD-TV.