With widespread South American weather concerns, prices could go much higher because of modest U.S. carryover stocks and limited availability of competing crops including rapeseed, sunflower seed, and cottonseed. While South American total soybean production is smaller, lower domestic use allows exportation of a higher percent of the crop. That means South America exerts as much influence on the world soybean market as does the United States. Any major weather problems there, such as widespread drought, could dramatically tighten global supplies. So far, plantings are ahead of normal in Brazil and Argentina, with over two-thirds of the crop planted.
Soil moisture appears to be about normal.
It is important to remember that U.S. soybeans compete in a global market for oils and protein meal, not just in a soybean market. These products are produced from approximately a dozen competing oilseeds, along with fish meal and oil, and animal fats and oils. Supplies of competing oilseeds are down from last year, and are contributing to strong U.S. exports and domestic crushings. The declines reflect major shifts from oilseeds to grain production in Canada and Europe, and disappointing weather in several other areas, including China. These projections are based on normal weather this winter and early spring in South America.