Soybeans supplant corn as dominant U.S. crop

Soybeans are the dominant crop nationwide at 89.6 million acres and there’s plenty of oilseeds leftover from last year to sell, the U.S. Department of Agriculture (USDA) confirmed today.

The Iowa Soybean Association (ISA) and industry partners are going on the offense to market what’s left of last year’s 4.4-billion-bushel record crop and this year’s soybeans. With China poised to impose a 25-percent tariff of U.S. soybeans on July 6, ISA leaders say enhancing demand and market share worldwide is crucial to mitigate potential export losses from the world’s top oilseed buyer.

“We’re going to continue building demand in Europe, Latin America, the Middle East, Southeast Asia — all around the globe,” said ISA President Bill Shipley of Nodaway. He’s leading a delegation of ISA leaders to Europe next month.

The 28-nation European Union is projected to be the world’s second largest soybean importer during the current marketing year, which ends Aug. 31, at more than 514 million bushels. The goal of the nearly two-week soybean checkoff-funded trip is to talk with buyers and government officials, highlight U.S. sustainability practices and build relationships to ultimately increase United States’ 26-percent market share in the region.

“We’ll simply tell our story, how we raise soybeans in a sustainable way,” Shipley said. “Plus, we’ll stress the U.S. is a reliable supplier. We don’t have delivery issues like our competitors.”

Even though soybeans are caught in the middle of a brewing U.S.-China trade war featuring tit-for-tat tariffs, U.S. farmers planted 500,000 more acres of the oilseed than corn this year, the report said. Soybeans acres are down 1 percent compared to 2017, but 600,000 more than March estimates.

Iowa growers seeded 9.9 million acres of soybeans, 1 percent less than last year but 100,000 more than March projections, the report said.

The USDA Grain Stocks Report indicates 1.22 billion bushels of soybeans are stored in all positions nationwide, up 26 percent from this time last year. On-farm storage totaled 377 million bushels, up 13 percent from a year ago.

In Iowa, the stocks report said more than 219.5 million bushels of soybeans are in storage as of June 1, compared to nearly 177.5 million last year. On-farm storages statewide totaled 71 million bushels, up 9 million from last year.

With the potential of another big crop looming and plenty of soybeans to move, ISA leaders will participate in U.S. Soybean Export Council trade missions and buyers’ conferences next month in Egypt, Mexico and other key markets. Egypt, with a growing aquaculture industry requiring more soy-based feed, is a shining example of growth. The nation purchased nearly 63 million bushels of U.S. soybeans as of June 14 compared to nearly 19 million all last year, records show.

“The U.S. may miss out on some sales as trade disagreements persist with China and other countries, so it’s imperative the soybean industry works to enhance sales — offense is the best defense,” said ISA Market Development Director Grant Kimberley. “Worldwide demand for soybeans is still good.”

U.S. soybean disappearance from March through May proves it. The USDA Grains Stocks Report indicates 888 million bushels were crushed or exported for the quarter, up 15 percent from the same period a year ago. Anticipated global growth for soybeans is about 560 million bushels in 2018-19, which is almost identical to Iowa’s production last year, according to industry experts.

November soybeans on the Chicago Board of Trade closed 3 cents down today at $8.80 per bushel. Though prices have tumbled nearly $2 per bushel since late May due to trade uncertainty, analysts say it could spur sales.

“If you want the cheapest beans and want them in 11 to 12 days, you are going to buy from the U.S.,” Cory Bratland, a trader and analyst for Kluis Commodities of Wayzata, Minnesota, told clients and industry officials today during a webinar. He noted ships have been waiting off Brazilian ports for weeks.

“For quick shipments, we have a real advantage,” he said.