cancel
Showing results for 
Search instead for 
Did you mean: 
rickgthf
Senior Advisor

Looking at soybean demand scenarios for the remainder of this year and next.

Below is a soybean demand chart using past/current USDA numbers and 2020/ 2021 conservative scenarios using 84 million acres and 52 bu/a yield.  Keep in mind, South America has plenty of beans to sell and weak currencies to sell into, China's problems will undoubtedly limit its demand for the foreseeable future which SA will have no trouble filling.  The 2019/2020 exports include China's 13 MMT and they will have no pressure next fall to buy any more than that assuming good SA prospects in the fall.  The blue line shows how far along the Chinese are in their annual buying.  Normally they've bought 90% or so of their buy by now (1st week of Feb), last year they bought 10 MMT in spring trying to get trump to agree to a deal.  This market year they've bought 13 MMT and you can assume they're pretty much done buying for the next few months.

  So it seems that everything depends on if the Chinese come back into the US market next fall in a huge way.  If not, we'll be looking at 26 MMT carryout.

soybean crush, expts, carryout 09-20-page-001 (3).jpg
0 Kudos
10 Replies
BA Deere
Honored Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.

Well, if they don`t buy beans directly, they`ll buy it 2 bushel at a time in each pork carcass they import.  Which also includes 10-12 bushel of corn, plus profits to American farmers and workers.  They`re on the hook to buy $40 billion in something ag related and really can`t afford the wrath of more US tariffs.

freedom1493
Veteran Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.


@BA Deere wrote:

Well, if they don`t buy beans directly, they`ll buy it 2 bushel at a time in each pork carcass they import.  Which also includes 10-12 bushel of corn, plus profits to American farmers and workers.  They`re on the hook to buy $40 billion in something ag related and really can`t afford the wrath of more US tariffs.


Gotta wonder how much frozen-reserve pork China still has if they are saying their pork prices are up 116% from last year even after they've already released 130,000 tons in the first 45 days of 2020.

http://www.ecns.cn/news/2020-02-14/detail-ifztrmvi9817392.shtml

k-289
Senior Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.

Keep  in  mind  they  could  be  ,  Importing  their  own-ed  hogs  -   -   - 

freedom1493
Veteran Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.


@k-289 wrote:

Keep  in  mind  they  could  be  ,  Importing  their  own-ed  hogs  -   -   - 


They obviously aren't importing enough Smithfield pork if prices raised by 116% and Hubei province needed the 50 tons of Yak meat they just got in from Mongolia.

0 Kudos
BA Deere
Honored Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.

First of all, what administration`s justice department okayed the foreign ownership of the previously US owned Smithfield pork producing and processing corporation?   It didn`t just happen prior to the 2016 election.  

But, until this is rectified in the president`s 2nd term, if China buying their own pork from the US destination, that`ll be less pork hanging over the entire market.  And those hogs mostly ate US grown feed and employed US hoghouse janitors and illegal aliens  that processed them  🙂 "a pound is a pound the world around".

0 Kudos
roarintiger1
Honored Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.

It doesn't really matter if they source the beans somewhere else, they should still be held accountable to purchase US goods. Either they buy something from the US, or slap heavy tariffs on them. It's time to bring the hammer down.  

0 Kudos
rickgthf
Senior Advisor

Re:In 2018, the Chinese imported 29,000 MT of US pork, in......Didn't ra

In 2018, the Chinese imported 29,000 MT of pork.  In 2019, they imported 409,000 MT but you can see from the soybean crush data, it hardly moved the needle at all, only about 300,000 MT of beans. 

  I guess I won't be holding my breath for more domestic crush due to exports to China.  My guess is, the US isn't going to expand production for the remote possibility of two years increased exports.  They'll just raise prices.  

Besides, the Brazilians increased their pork exports to China by 218,000 MT as well.

  I'll put the "export beans as meat" theory right alongside the "China can't do without our beans" theory which we all know wasn't true.

0 Kudos
timetippingpt
Honored Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.

Your numbers seem a bit "blue sky" for the real world.  

1. Where do you get 84 mil harvested acres from IF we are going to plant 96 mil corn acres? Hay is more profitable, wheat is more profitable, hemp is, heck everything is.

2. Crush flat, exports down, again, on some pretty big increases in meat production. Just bogus math on that one.

80 mil acres at 48 bu, exports up 20%, crush up 7%, carryout down to about 200 is probably more likely, at least it is a balanced calcuation.

0 Kudos
sw363535
Honored Advisor

Re: Looking at soybean demand scenarios for the remainder of this year and next.

Basis is the market. Not futures.  I doubt if beans buy 70m acres or below.  Central belt is the only area obligated to plant them.  

Legal issues aren’t going to help.  Beans got moncantoed.