Overview of 2020 growing conditions and current market conditions
Ryan Ridley
Farms.com
Moe Agostino, Chief Commodity Strategist at Farms.com Risk Management, kicked off the 2020 Great Ontario Yield Tour Virtual Final Event on September 2 with a U.S. & Global Soybean Market Outlook for the harvest season based on 2020 growing conditions and current market conditions.
“Global soybean ending stocks have been trending lower the last couple of years,” explained Agostino. “This year will depend largely upon whether the USDA continues to lower the production acres and yield in the U.S. – we had a derecho storm, we had some dry weather, we haven’t had a very good finish for the soybean crop.”
The derecho storm that Agostino refers to was approximately 500 miles long by 100 miles wide, with soybean production damage conservatively estimated at 100 million bushels.
“A dry August and very little moisture from hurricanes Marco and Laura are also going to equate to lower yield,” he added.
Agostino touched base on U.S. soybean sales to China, noting that soybean exports to China are on record pace.
“China has been buying on auto-pilot. There’s still a lot of skepticism that the sale made to China will not ship but nonetheless soybean exports are on a record pace,” he explained. “It’s even higher than the 16/17 pace and it should continue to year-end which will help the U.S. soybean balance sheet.”
Agostino reports soybean yield in the United States is expected to be lower this year, but with a good finish, record crops can be achieved.
“At the end of my 9th U.S. Corn Belt Crop Tour I concluded the soybean yield around 49 bpa in mid-July, but I said that if you can get a good finish, you’ll get a record crop. There was no disaster in the making but it looks like we are headed lower,” said Agostino. “How low we will have to see when the combine starts rolling.”
2020 U.S. soybean ending stocks were projected at 610 bpa by the USDA in August, but Agostino believes this number is probably lower.
“That number is probably closer to 510 when you subtract some acres, with as much as 500,000 acres from the derecho storm and some prevent plant acres and abandoned acres, that number could be even lower,” he said. “If demand continues to come in record strong, that’s going to add to the sensitivity in soybean futures.”
Agostino also noted record strong production of soybeans in South America.
The 2020 Great Ontario Yield Tour Final Event was held online on September 2 & 3, and featured several presentations from experts, and event hosts and sponsors. Corn and soybean samples were taken by scout on hundreds of farms across Ontario. At the end of the tour, province-wide corn and soybean yield estimates were released, as well as regionalized estimates for south, east, central, and western Ontario. Moe Agostino’s presentation was given as part of the final event.
Photo: pxfuel.com/en/free-photo-ozpuf
Related Article(s):
Ont. soybean yield could be record-breaking: https://www.farms.com/ag-industry-news/ont-soybean-yield-could-be-record-breaking-710.aspx
Maximizing corn production profitability: https://www.farms.com/ag-industry-news/maximizing-corn-production-profitability-049.aspx