The latest USDA Supply and Demand report and Crop Production Report has highlighted significant challenges for the soybean market, sparking concern among market analysts and producers alike. John Heinberg, Market Advisor at Total Farm Marketing, provided insights into the implications of the report during a conversation about current market trends.
“The USDA report was highly anticipated, especially given the crop conditions and the impact of spring flooding,” said Heinberg. “Unfortunately, the numbers were very negative for soybeans, and we’re seeing the market respond accordingly. Prices dropped by 15 cents, and it feels like there’s more room for them to fall.”
One of the key factors contributing to the bearish outlook is the increase in planted soybean acreage. “They added a million acres to soybeans, bringing the harvested area to 86.3 million acres,” Heinberg noted. “This is particularly concerning given the already high global supplies. Crop ratings have remained strong, and bushels per acre are expected to be robust. If current projections hold, we could be looking at ending stocks of 560 million bushels for the 2024-25 season. This would be the third largest on record since 2018.”
Heinberg also raised concerns about demand forecasts. “The USDA typically increases demand when they see a rise in supplies, but I’m skeptical about those numbers holding up. If sales don’t pick up, we could see carryout numbers pushing into the 600 to 700 million bushel range by spring.”
The report has underscored the ongoing challenge of competing in the global market, particularly against South American producers. “With extra supplies on hand and strong competition from South America, the U.S. export business is facing significant headwinds,” Heinberg said. “The market is in a tough spot, and unless we see a significant uptick in demand, prices could remain under pressure for the foreseeable future.”
