The drought that has put a severe dent in the US corn crop is now threatening to do the same kind of damage to the soybean crop. Corn, which is planted and harvested earlier than soybeans, has been in the spotlight for months now, while there was still hope that soybeans might escape.
The US Department of Agriculture (USDA) has lowered the soybean crop estimate by 13% from last year’s average, and according to MarketWatch, at a private analysts’ tour yesterday there was additional confirmation that the soybean crop is going to be small. The latest USDA estimate calls for production of about 2.7 billion bushels.
The forecast for export quantities of soybeans fell to 1.11 billion bushels, about 25% lower than last month’s forecast. The largest customer for US soybean oil is China, and the Chinese have been boosting purchases for a while now from last year’s soybean crop. Still, China’s forecast imports from the US total 59.5 million tons.
Prices rose to $17.43/bushel today, still below the record price of $17.575/bushel set in July, but close and sure to climb even higher as the harvest begins in earnest.