Will soaring soybean prices boost production?
Do you know why soybean prices are breaking a record this week? Read how shrinking global supplies and booming demand from China fueled soybean prices in the U.S. to over $ 13 per bushel. Also, take a look at how prices are affecting the projections for soybean cultivation in the upcoming season.
Rise of soybean prices
The soybean prices keep breaking records since the beginning of 2021. Ending stocks are projected at 120 million bushels, down 405 million compared to the previous year. Shrinking supplies and abrupt demand from China boosted the prices to levels unseen since 2014. The WASDE report projects the US season-average price for soybean to be set at $11.15 per bushel but last week has seen numbers around as much as $14 per bushel. Moreover, in March the soybean prices did not go below $13.56 and since the beginning of the year, the numbers were locked over $13. Soybean meal prices are set at $400.00 per tonne. The U.S. prices in March soared over 53% compared to the same month last year.
Production of soybean
According to experts, higher prices will prompt the farmers to extend their acreage for soybean cultivation in the upcoming year. Within the U.S. a total planted area of soybeans is estimated at 83.1 million acres – an increase from 76.1 million in 2019/2020 but not as much as 89.2 million calculated for 2018/2019. Yield per harvested acre is also expected lower by 0.4 million compared to two years ago. Still, the prices are much higher with an increase from an average of $8.48 per bushel in 2018/2019 to a recent average price for soybean at $11.15.
The forecast for global soybean production in March is set at 361.82 million metric tonnes of which the U.S. is responsible for 112.55 million. Higher soybean production is estimated for Brazil – projections raised by 1 million tonnes to a total 134 million.