Department of Economics

Soybean Outlook for 2010 & Beyond

Mar. 9, 2010

Chad HartAssistant Professor/Grain Markets Specialist

chart@iastate.edu515-294-9911

Department of Economics

U.S. Soybean Supply and Use

Source: USDA

2007 2008 2009 2010

Area Planted (mil. acres) 64.7 75.7 77.5 77.0

Yield (bu./acre) 41.7 39.7 44.0 42.9

Production (mil. bu.) 2,677 2,967 3,361 3,260

Beg. Stocks (mil. bu.) 574 205 138 210

Imports (mil. bu.) 10 13 8 8

Total Supply (mil. bu.) 3,261 3,185 3,507 3,478

Crush (mil. bu.) 1,803 1,662 1,720 1,655

Seed & Residual (mil. bu.) 93 101 177 168

Exports (mil. bu.) 1,159 1,283 1,400 1,325

Total Use (mil. bu.) 3,056 3,047 3,297 3,147

Ending Stocks (mil. bu.) 205 138 210 330

Season-Average Price ($/bu.) 10.10 9.97 9.45 8.80

Department of Economics

Storage Issues

Source: Hurburgh and Elmore,ICM News, 10/15/09

Department of Economics

World Soybean Production

Source: USDA

Department of Economics

Soybeans – Argentina & Brazil

Source: USDA

65

75

85

95

105

Mill

ion

acre

s

2700

3150

3600

4050

4500

Mill

ion

bush

els

Area Harvested Production

Department of Economics

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Canada Mexico Brazil EU China South KoreaJapan Australia

Exchange Rates (Jan. 2003 = 1)

Source: USDA, ERS

Department of Economics

Soybean Export Sales

Source: USDA, FAS

0

200

400

600

800

1,000

1,200

1,400

Week

Mill

ion

bush

els

2007 2008 2009

Department of Economics

2009 U.S. Soybean Exports

Source: USDA, FAS

Mexico5%

Japan4%

Other19%

EU8%

China64%

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Renewable Fuels Standard (RFS)

0

2

4

6

8

10

12

14

16

2009 2010 2011

Billi

on g

allo

ns

Additional Advanced Biofuels BiodieselCellulosic Biofuels Conventional Biofuels

Year Biodiesel(million gallons)

2009 5002010 6502011 800

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0

20

40

60

80

100

120

140

Jan-

86

Jan-

88

Jan-

90

Jan-

92

Jan-

94

Jan-

96

Jan-

98

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

Jan-

10

Jan-

12

Jan-

14

Jan-

16

Jan-

18

$ pe

r bar

rel

Crude Oil Prices

Sources: EIA, NYMEX

Department of Economics

Projected 2009 Season-Average Soy Price

8.00

8.50

9.00

9.50

10.00

10.50

5/1/

2009

6/1/

2009

7/1/

2009

8/1/

2009

9/1/

2009

10/1

/200

9

11/1

/200

9

12/1

/200

9

1/1/

2010

2/1/

2010

3/1/

2010

$ pe

r bus

hel

Futures USDA

Department of Economics

Soybean Futures

Source: CBOT, 3/8/10

9.20

9.30

9.40

9.50

9.60

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

$ pe

r bus

hel 0.08

0.160.13

0.01

Department of Economics

Ratio: Nov. 2010 Soy/Dec. 2010 Corn

Source: CBOT

2

2.1

2.2

2.3

2.4

2.5

2.6

2.7

Department of Economics

Input Costs

Source: USDA, Agricultural Prices, Feb. 26, 2010

Department of Economics

Thoughts for 2009/10 and BeyondGeneral economic conditions

Projected economic recovery is a major key for crop pricesWeakness in the dollar helps exports, but dollar may fight backNearby crude oil prices floating in near $80

Supply/demand concernsLivestock numbers continue to declineSouth America: Record soybean crop

2009/10: USDA: Corn $3.70, Soy $9.45Futures: Corn $3.54, Soy $9.37

2010/11: USDA: Corn $3.60, Soy $8.80Futures: Corn $3.87, Soy $8.98

Department of Economics

Thank you for your time!

Any questions?

My web site:http://www.econ.iastate.edu/faculty/hart/

Iowa Farm Outlook:http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/

Ag Decision Maker:http://www.extension.iastate.edu/agdm/