Oil Crops Outlook: Domestic

Higher Yields Boost 2022/23 U.S. Soybean Production and Ending Stocks

The average U.S. soybean yield forecast is fractionally higher in this month’s Crop Production report at 50.2 bushels per acre. With the forecast of U.S. harvested area unchanged, the 2022/23 soybean production is lifted by 33 million bushels to 4.35 billion bushels. The slight bump in supply and higher domestic meal consumption, crush is raised 10 million bushels from the previous forecast to 2.25 billion bushels. With exports unchanged, soybean ending stocks are increased by 20 million bushels to 220 million bushels. The 2022/23 U.S. season-average soybean price forecast is unchanged this month at $14 per bushel.

U.S. Soybean Harvest Nears Completion

In the November Crop Production report, USDA, National Agricultural Statistics Service (NASS)raised the 2022/23 soybean production forecast to 4.35 billion bushels on a higher yield and unchanged area. Higher yields in Iowa, Missouri, Nebraska, and North Dakota contribute to the increase in the national yield forecast from 49.8 to 50.2 bushels per acre. As of November 6, a reported 94 percent of the 2022/23 soybean crop had been harvested. While harvest was slow to start, favorable weather has contributed to the progress of this year’s crop that is well ahead of the 5-year average of 86 percent.

With more soybeans available, 2022/23 U.S. crush volumes are expected to grow by 10 million bushels to 2.25 billion bushels. Soybean meal and oil generated from higher crush volumes will offset lower beginning stocks and satisfy anticipated increases in domestic demand. More specifically, the 2022/23 soybean meal domestic disappearance forecast is raised by 0.25 million short tons to 39.7 million short tons this month, aligning with back year changes. Strong domestic demand is seen supporting high domestic prices, lifting the 2022/23 price forecast by $10 this month to $400 per short ton.

Similarly, strong domestic demand for U.S. soybean oil continues to elevate prices. While the 2022/23 domestic price forecast remains unchanged this month at $0.69 per pound, U.S. soybean oil export prices remain above world prices. Throughout the last 6 months, monthly .S. soybean oil export prices have been, on average, $300 per metric ton higher than in Argentina—the largest U.S. competitor in the soybean oil export market. Consequently, foreign demand for U.S. soybean oil is seen waning. As of October 27, total commitments for the 2022/23 campaign are 78 percent lower than the same time last year at 29,600 metric tons. For these reasons, the 2022/23 soybean oil export forecast is lowered by 100 million pounds to 1.3 billion pounds.