USDA's March 31st Prospective Plantings Report for soybeans showed that farmers were planning on putting in 74.793 million acres of soybeans this growing season. Allendale's estimate of 74.239 million acres was again right on the bulls-eye! USDA's March acreage estimate implies harvested acres of 73.81 million acres and using a trend yield of 42.3 bu/acre suggests total production of 3.121 billion bushels. With carry-in stocks of 130 million bushels and imports of 8 million bushels, total supply of soybeans following the 2008 harvest will be 3.26 billion bushels. Allendale estimates total usage at 2.915 billion bushels, which projects ending stocks of 345 million bushels. This implies stocks-to-use of 11.8% versus the present 2007/08 ending stocks-to-use of 4.6%. Increasing stocks suggests a season average farm price for 2008/09 at $9.20/bu versus the present 2007/08 level of $10.40/bu. As with corn, the USDA is scheduled to release its first official supply and demand in its May WASDE report.
Since 2004, from the March Prospective Planting Report to the June Planted Acreage Report, USDA has decreased soybean acreage each year. The average increase has been 1.2466 million acres with a minor correction of 602 thousand acres and a maximum of last years 3.059 million acres. Allendale research suggests corn and soybean acreage adjustments may be more influenced by planting progress rather than for economic reasons. Case in point was that in 2007, corn futures price decreased, while soybean futures price increased between the 2007 March to June time frame. Yet, last year corn acres increased, while soybean acres decreased as planting progress got off to an early and fast start.
USDA is not expected to release its first 2008 soybean planting progress until April 28th. The five-year average for that period of time has been 6% complete, then 52% by the 20th week of the calendar year or near May 20th and 84% complete by June 2nd. Any delay in soybean plantings is expected to be bullish for its futures.
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