According to projections from the annual USDA Agriculture Outlook Forum, soybeans are expected to see an increase in planting and supply, which will contribute to a significant drop in price per bushel during 2013. The USDA Grain and Oilseeds Outlook, which provides the USDA’s projections of 2013/2014 supply and demand for wheat, corn, rice, and soybeans, projects that increased planting and price drops could result in a high net return of soybean crops.
The report states that predictions for high net returns are based on expectations for strong new-crop futures and cash forward prices. Soybean planting area is projected at 77.5 million acres, up .3 million from last year, but a number of other factors are expected to contribute to an increase in 2013 soybean planting, including:
· Opportunity for double-cropping with winter wheat acres
· Declined cotton planting in the Mississippi Delta region
· Reduction in Conservation Reserve Program acres in the Midwest
An increase in soybean planting will also result in cost-per-bushel decreases this year, according to the USDA’s Outlook projections. The soybean supply for 2013/2014 is expected to increase 11% above the 2012/2013 supply, which was reduced by last year’s drought. As a result, soybeans will fall from the 2012 average of $14.30 per bushel, to $10.50 for the 2013 crop. U.S. soybean ending stocks are projected to reach 250 million bushels for the 2013/2014 year, double that of 2012/2013 and the highest since 2006/2007.
The factors influencing increased soybean planting this spring will open up opportunities for growers to see favorable net returns and supply an ample product that will keep prices low for consumers.