As August gets underway, the US soybean crop is heading into its most critical developmental stage. With improved weather forecasted for the next couple of weeks, Gro’s machine-learning model is currently predicting that the soybean harvest will at least match last year’s output, despite this season’s cut to planted acreage.
Scorching heat and dry conditions in many parts of the Midwest in recent weeks are now forecast to give way to milder temperatures. Moderate rain is predicted in most of the region over the next week, with heavier amounts in northern areas, as seen in this Gro display.
Gro’s vegetative health index, weighted for soybean planted areas using Gro’s Climate Risk Navigator for Agriculture, is currently above the historical average, and drought levels, as measured by the Gro Drought Index, have eased.
August and September weather is critical for the soybean crop, which enters the pod setting and pod filling stages during this time. Gro’s US Soybean Yield Forecast Model, which predicts yields down to the county level, is currently forecasting overall soybean yields will be higher year over year.
A strong soybean crop will be needed as global export demand has shifted to the US following a disastrous season in Argentina, the world’s No. 1 exporter of soybean products, which Gro wrote about here. As a result, US exports of both old and new crop soybean meal have jumped.
Total export commitments for old crop US soybean meal are currently at record-high levels for this time of year, and are running at 5.8% above the five-year average, as seen in this Gro display. Prices have tracked the robust demand. The front-month August soybean meal futures contract rallied more than 10% in July before giving up some gains on profit-taking.
Soybeans are crushed to make soybean meal, which is used largely for livestock feed, and soybean oil, used as a food product and to manufacture biofuel. Soybean oil is the primary feedstock for making renewable diesel, the fastest growing type of biofuel in the US.
The heightened demand for soybean products has pushed the US crushing industry into ever higher levels of production, as seen in this Gro display.
Soybean oil prices also have risen strongly, with the August front-month contract gaining more than 50% since the start of June, before dropping back. Soyoil prices got a lift from crude oil — WTI prices are up 20% since the start of June — because of the vegetable oil’s use in biofuel.
Also propelling soyoil prices is uncertainty surrounding global oilseed supplies. Russia has renewed its blockade of Ukrainian ports, halting flows of sunflower seed oil. And drier weather could reduce canola production in Canada and Australia, and palm oil production in Indonesia and Malaysia.
Gro x DTN Digital Yield Tour: Beginning Monday, August 7, Gro is partnering with DTN for the Sixth Annual Gro x DTN Digital Yield Tour to track how the US corn and soybean crops are progressing. The tour will present a field-level view from the DTN team, and a regional, global, and climate view from Gro’s forecasting models to provide comprehensive, on-the-ground reporting of national yield estimates. Read more about the tour here.