On Friday, Oct. 9, the U.S. Department of Agriculture released what one market analyst called a bullish report of the World Agricultural Supply and Demand Estimates (WASDE), and the markets responded.

“The Chicago Board of Trade saw March soybean futures rally 25 ¼ cents Friday to trade at new life of contract highs at $10.51, settling the day at $10.48 ¼,” said Chip Whalen, CIH vice president of education and research.

Whalen spoke alongside Mac Marshall during the U.S. Soybean Export Council’s WASDE briefing Oct. 12.

Both Whalen and Marshall agree that the story is shifting from one of a global soybean surplus to one of tight supplies.

Whalen explained that much of this movement started out with concerns over the crop quality in Iowa as 20% of the state’s crop was reported in poor to very poor condition as of Sept. 13.

“This where some of the buying initially started,” Whalen said.

Marshall, who serves as vice president of market intelligence for USSEC and the United Soybean Board, spotlighted USDA’s downward revision of U.S. ending stocks by 170 million bushels to 290 million bushels — approximately 23 days’ use.

USDA’s yield estimate was unchanged; however, the area was revised down by 700,000 acres resulting in a smaller crop size of about 4.268 billion bushels, down 45 million bushels. Additionally, USDA revised its exports up by 75 million bushels to a record 2.2 billion bushels for the 20/21 marketing year.

“While world ending stocks were revised down 4.89 million metric tons to 87 million metric tons, USDA revised its global demand projects up by 1.5 million metric tones to 370.6 million metric tons,” Marshall called out. “Furthermore, China’s crush, consumption and imports were up by 1 million metric tons, Bangladesh was up 600,000 metric tons and Thailand was up 300,000 metric tons.”

Whalen added that this is increasingly a demand story, with “the very strong exports we’ve seen both in terms of old-crop shipments for the marketing year that ended at the beginning of September and then the new-crop sales commitments.”

What does that mean for buyers?

“There’s obviously risk,” he said. “There’s been big price movement and change can still take place as we move into November and even into January. There could be more revisions coming. It’s possible the balance sheet becomes tighter … or maybe not.

“Prices have rallied about $1.75 since mid August when USDA initially began revising new crop bean production lower. If we go back to March and May, prices have gone up about 27%. We’ve rallied from about $8.30 per bushel to $10.50 more recently. Much of this occurred in the past month or two.”

Whalen added that soy buyers and traders have seen a fairly dramatic movement in price over a relatively short period of time.

“There are two things that strike me: just how low we’ve become in a relatively short period of time,” Whalen said. “This has really gotten the market’s attention and is something that buyers are aware of. What’s driving it? A tremendous amount of buying in the market. We are off to a record start with nearly 35 million tons in outstanding soybean sales for marketing year 2020/21.

“We’ve seen quite a bit of fund buying. Reuters reported that it’s a record position. When we look at CFTC commitments of traders, earlier this spring, we were at a record low and now we are actually net long. Buying half a million contracts of beans is going to add pressure. Not to scare anyone, but there could be more buying.”

Worldwide, demand for for soybeans is up 16.3 million metric tons year-over-year, explained Mac Marshall, USSEC and USB vice president of market intelligence. This outpaces the 10-year trend of demand growth averaging 11.5 million metric tons per year.


For most of the first half of the 2019/20 crop year, soybean export shipments (blue bars) were significantly behind the pace needed to reach the annual total, shared Chip Whalen, CIH vice president of education and research. However, recent large weekly export shipments since August have eliminated this shortage.