Soybeans Update – May 23, 2017

The 2017 CropProphet forecasts for U.S. soybeans began on May 7 following a period of beta testing and are now being updated daily on the CropProphet website. The forecasts are derived from county-level statistical models that seek to capture the relationship between the final harvested yield and year-to-date weather patterns and satellite health indications. The long-term upwards trend in yield serves as a baseline for the forecasts, and the projections are refined on a daily basis through the growing season as additional information becomes available.

The dominant theme of the soybean outlook at this early stage is the very large increase in planted acreage compared to last year, owing to shifting cost and price considerations among producers. According to the March 31 USDA prospective plantings report, soybean acreage is expected to increase widely (see figure below), and the net U.S. increase of over 6 million acres is the largest projected year-over-year increase in the history of the prospective plantings report except for the recovery from the anomalous shortfall in 2007.

 

 

The projected U.S. soybean acreage of 89.5 million acres is substantially higher than last year’s record acreage, and such expansive plantings will certainly generate a large crop unless unfavorable weather prevails. CropProphet currently expects U.S. soybean production of 4.15 billion bushels, which is only 3.6% below last year’s record crop, and therefore another production record is easily within reach if the weather is only modestly favorable in the coming months. Assuming normal rates of crop abandonment, the expected yield would have to reach 48.7 bushels per acre (bpa) to elicit a new production record this year; this is only 1.4 bpa above the current expected yield and is well within the range of uncertainty at this time of year (see figure below).

 

 

Soybean production is expected to be particularly high relative to normal in North Dakota and Minnesota, where acreage is projected to be much higher than last year. Remarkably, North Dakota’s soybean plantings are expected to be 6.9 million acres, or nearly 8% of total U.S. acreage; the state has more than doubled its soybean production in the past 8-10 years.

 

 

The quantitative weather outlook component of CropProphet indicates that weather conditions will be favorable for soybean prospects in the next several weeks, with relatively cool temperatures in the Midwest and generally above-normal rainfall in southern growing areas. Soybean yields are expected to rise in nearly every state, and the U.S. yield outlook should improve by about 1 bushel per acre (see figure below).

The next update to the soybean commentary will occur on June 6.