Subscribe
Share
Share
Embed
The NDSU Extension weekly podcast In the Pod: Soybean Updates delivers timely insights and expert advice on soybean production.
You're listening to In The Pod, Soybean Updates, a weekly trek into the latest soybean information from NDSU Extension. It seems whenever the USDA releases a report, the market reacts. Frayne Olsen, NDSU Extension crops economist, has insight about the latest USDA release. Frayne, what report has recently been released by the USDA, and what's the market reaction?
Frayne Olson:This week, we got the monthly update for the WASDE report, which is the World Agricultural Supply and Demand Estimates. So every month, USDA updates their forecast for production and consumption of the major crops we have in The US. Coming into it, a lot of the traders and analysts were expecting pretty neutral report, little tweaks here and there, but we did get some interesting numbers. There were some surprises actually in the positive side of marketplace rather than negative side. The last couple reports we've gotten have put some downward pressure on prices. This one actually had some lift in the marketplace. For soybeans specifically, they did increase the national average yield a little bit. However, they also increased the consumption part. The two major users for soybeans are domestic crushing for soybean oil and soybean meal as well as for exports. Both of those numbers increased. Even though the production went up, consumption went up faster than production. And so our ending stocks, the amount we expect to have just before harvest of next year, actually got tighter. So we got a thinner margin, smaller margin for error than we first thought, and that lifted prices. In my view, we got kind of a support in the marketplace right now because the soybean market's a little bit more sensitive to those numbers than the corn market has been.
Bruce Sundeen:So economically, what else is affecting the market?
Frayne Olson:As we move forward off of these reports, there's a couple things. First, at the end of November, president Trump and president Xi are gonna get together again face to face at a very large economic summit in Asia. And they're gonna have a couple hours to be able to sit down and talk some more and negotiate some more on this trade agreement we're working on between China and The US. Now negotiators for both The US and China have been working in the background, but there's always some issues that come up that the two leaders have to hammer out. Agriculture will be part of those discussions. We're not exactly sure how much time and effort they will put into agriculture versus technology and AI and a bunch of other stuff that we have to worry about on the trade front. But the fact that they're still talking, even though some of the negotiations have been a bit tense and there's been some disagreements on who's doing what to whom, They are talking, which is positive, and they are moving forward on it. The other thing we're gonna be watching for as we move into kind of the holiday season, especially into December and into January, will be the crop condition for the South American soybean crop. I mean, the South Americans there, in particular Brazil, they produce more soybeans than we do, and they export more soybeans than we do in The US. So what happens down there and the weather they have during their growing season is gonna have a huge impact on US prices as well. We're So gonna see some continued volatility as we move through the winter season, which hopefully would give some pricing opportunities for farmers.
Bruce Sundeen:Frayne, do you have other comments about what is affecting the market?
Frayne Olson:Yeah. So one of the other questions I commonly get is about some of the changes we've had now in some of the energy policy. Not only the blending requirements, but also what they call 45 z, which is that tax credit for the manufacturers, the processors that make renewable fuels. Both of those are very positive for both corn and soybeans. What's interesting though is that it's gonna take a while for that increase in demand or for those policies to really impact the soybean market. In my best guess, it'll probably be starting to impact the market more in the next twelve to twenty four months, not over the next two or three months. This is something we will be watching. It's definitely gonna have some long term implications for the soybean world, and we're just gonna have to pay attention to it. But it's not something that's gonna happen and make changes really quickly.
Bruce Sundeen:Thanks, Frayne. Our guest has been Frayne Olson, NDSU extension crops economist. You're listening to In the Pod, Soybean Updates, a weekly trek into the latest soybean information from NDSU Extension supported by the North Dakota Soybean Council.