US Acreage Cut Looks to Shrink Soybean Stocks Further

A cut to US acreage planted to soybeans dealt a blow to already tight 2023/24 soybean ending stocks, which now look set to finish at their lowest level in 10 years. 

The USDA Acreage report released last week put soybean planted area at 83.5 million acres, which is down 4.5% from last year and the smallest acreage since 2019. That comes as dry conditions since the start of the season have weighed on the crop’s outlook — with rainfall bringing some relief in recent days. 

While Gro’s machine-learning US Soybean Yield Forecast Model has risen from its lows in late June, the model continues to project yields well below the USDA’s forecast. Growing conditions have improved in the past week, but the Gro Drought Index still shows “moderate” levels of drought when weighted for soybean planted area, as seen in this display from Gro’s Climate Risk Navigator for Agriculture. 

The latest week’s good-to-excellent crop condition ratings for soybeans are at their lowest level since 2012 for this time of year. Top-producing state Illinois saw its rating improve marginally, but conditions remained just 30% good-to-excellent and 26% poor-to-very-poor. Two other states with especially low crop conditions are Michigan and Missouri.

For soybeans, August weather is the most important. That’s when pod setting and filling occur, and the crop needs recurring rainfall to ensure good yields. 

Prices are already rising as 2023/24 soybean demand looks set to overwhelm available supplies, sinking soybean ending stocks for the year. The impact of this is likely to be far-reaching, as both exports and crush demand in the US have seen significant growth. Soybean crushing demand is up nearly 40% from 2010, and is expected this year to represent a bigger pull than exports, as seen in this Gro display.

The higher US soybean prices could stifle demand from export markets, especially with Brazil export prices undercutting the US. Brazil, which harvested a record soybean crop this year, is the world’s biggest soybean exporter, providing China with the bulk of its imports of the oilseeds. US exports historically have become more competitive with Brazil after the US harvest in September.