After high hopes that the market would finally realize how much “additional” soybean acres would be planted for 2021/22, participants were left speechless when USDA said zero additional acres were considered for planting from Mar. 1 to Jun. 1. Shockingly, soybean acreage remained at 87.6 million acres in last Wednesday’s acreage report, well below the trade guess of near 89.1 million acres.
This amount of acreage is not enough to replenish a tight soybean balance sheet and could further tighten the current 2021/22 projected ending stocks of 155 million bushels should there be weather problems. Arguably, weather is already creating moderate concerns for grain crops, including soybeans, in the northern Grain Belt. Sweltering temperatures in the upper 90s and limited rainfall over the last two months have soybean crop ratings in North and South Dakota a very low 25 and 26 percent good to excellent, respectively. The U.S. soybean crop as a whole is rated 60 percent good to excellent, well below last year’s 71 percent good to excellent.
Weather is most critical for soybeans in August, so all is not lost. However, this crop is certainly not off to a perfect start, and the forecast for July looks warmer and drier than average. The current soybean yield estimate of 50.8 bushels per acre could be challenging to hit, and current production estimates based on 86.7 million harvested acres is 4.405 billion bushels. This is not enough to cover the exceptionally strong forecasted demand for 2021/22 at 4.42 billion bushels.
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