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Commodities 2021: US soybean prices likely to rise on high exports, tight stocks


US farmers already sold 90% of 2020-21 projected exports

China's swine recovery seen 100% in H1 2021, boosting soy demand

Ending stocks at 7-year low, supporting prices

Phase 1 deal uncertain as China lags in purchases

New Delhi — The US soybeans prices are likely to soar in 2021 as the export optimism grows stronger on robust China demand, coupled with tight ending stocks.

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While the S&P Global Platts Analytics forecast the average farm price of US soybeans in 2020-21 marketing year (September–August) at $10/bushel, up 17% on the year, the US Department of Agriculture's latest World Agricultural Supply and Demand Estimate report was more bullish at $10.55/bu, up 23%.

The projected rise in soybeans prices is largely attributed to the larger exports volume expected in 2020-21, the USDA said, as the exports are forecast at 59.87 million mt, up 31% year on year.

The 2020-21 marketing year has been off to a flying start for the US soybeans farmers as they have been able to sell huge volumes of the oilseed.

Cumulative total export sales for 2020-21 US soybeans, as of Dec. 10, stood at 53.8 million mt, compared with 18.8 million mt in 2019-20, the USDA's weekly export data showed.

Soybean exports forecast for 2020-21 is likely to be revised higher in the upcoming WASDE amid stronger than expected export sales, analysts said.

The US soybean farmers have already sold 89.9% of the total 2020-21 projected exports between Sept. 1 and Dec. 10, while the 5-year average pace of sales for the same period is 66.6%.

Riding on firm demand, the CBOT soybeans futures prices closed above $12/bu benchmark on Dec. 17 for the first time since June 2014.

According to agricultural analysts, the recent rise in soybean prices is sustainable in 2021 as it is a demand-driven push, which tends to be resilient.


China has been a voracious purchaser of US soybeans in 2020-21, accounting for over 58% of total export sales till Dec. 10, up 8 percentage points on the year, the USDA said.

China is expected to continue its robust purchasing of the oilseed in 2021 as the country is expected to totally recover from African swine fever disease in the first half of 2021, a Shanghai-based agricultural consultancy JCI China told S&P Global Platts, as over 80% of the imported soybeans are processed into animal feed in the country.

The world's largest pork producer and consumer lost over 50% of its swine population to ASF, which began in August 2018.

Backed with a steady process of pork industry consolidation, leading to better swine inventory management and biosecurity measures, China's swineherd recovery was seen at 90% of the pre-ASF level as of Nov. 30, the Chinese agricultural ministry said.

China is the world's biggest soybean buyer and accounts for 64% of the global soy trade.


Despite the projection for higher supply in 2020-21, the US soybeans prices are expected to be well supported by rising domestic crushing and lower ending stocks in 2021, analysts said.

The USDA has forecast 17% higher year-on-year beans production of 113.5 million mt in 2020-21, primarily due to a 6% rise in yield at 50.7 bu/acre and 8% larger acreage of 83.1 million acres.

US soybean crush has established monthly peaks for each of the last ten months, excluding August, on strong margins, the USDA said.

According to the latest WASDE report, the US soybean carryout is forecast at a seven-year low of 4.76 million mt for 2020-21 because of higher crush usage.

The demand for soybean meal-based animal feed has been boosted by thriving meat exports, while the soybean oil sales have also seen upward trends due to rising biodiesel purchases, analysts said.

As a result, the USDA has increased its projection for the 2020-21 average soybean meal price by $70 on the previous year to $370/mt, while the average soybean oil price was seen 6.35 cents higher at 36 cents/lb.


The fate of the US-China Phase 1 trade deal, signed Jan. 15, is expected to be precarious in 2021 under President-elect Joe Biden, who saw it as a failure and advocated a need for "full review" of the agreements, analysts said.

After 18 months of retaliatory tariffs, Beijing signed the Phase 1 trade deal and promised to purchase $200 billion worth of US goods, energy, and services within two years, including agricultural goods worth $80 billion.

US soybean export sales to China between Jan. 1 and Dec. 10 stood at 31 million mt, at least 12 million mt short of Phase 1 target for the first year, a Chicago-based agricultural consultant said.

Through the first ten months, China has purchased only 55% of the year one target for all covered products, the US Bureau of the Census data showed.

Beijing's lagging pace of purchase, coupled with longstanding bilateral trade issues, such as technology transfer and intellectual property theft, are the possible stumbling blocks for the US-China Phase 1 trade deal in 2021, analysts said.