Strong exports send sell signal for beans in bin

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COLUMBIA, Mo. – Soybean farmers can take clues from the futures market on when to sell their current crop and on how many acres to plant this spring, said a University of Missouri crops analyst.

Strong export sales have kept current prices high, pulling beans out of the bins. Futures prices for this fall, however, are 75 cents per bushel lower.

A low price sends a signal to plant fewer soybean acres than currently planned, said Brian Willott, economist with the Food and Agricultural Policy Research Institute.

“The export number has been a pleasant surprise,” Willott said.

“In October we were projecting exports of 850 million bushels. Now we are looking at 960 million bushels.

“The weekly export sales figures from USDA confirm this growing demand. China has been a major buyer.”

Demand not optimistic. Demand from domestic soybean crushers is not as optimistic, however.

While price of soy oil remains strong, above 20 cents per pound, the price of bean meal, which is also created in the crush, has weakened.

Less soybean meal is needed as the numbers of livestock on feed has dropped.

“The value of the whole bean relative to the products favors exporting beans, rather than products,” Willott said.

The export picture may soften as about half of the soybean crop has been harvested in Brazil, south of the equator where their growing season is in our winter.

Scale back. Overall, Willott told soybean producers that he was bearish on soybean prices.

“Since prices haven’t fallen yet, it is a chance to make sales that you have been putting off.”

The most recent projection from USDA, shows $5.45 per bushel for the season average price this year.

If farmers actually plant the expected 73.2 million acres of soybeans this spring, as indicated on March 1 USDA intentions report, the price will drop, Willott said.

At that acreage, he sees a season-average price for the coming crop year of $4.99 per bushel.

“Given the seasonal price patterns, that would put soybeans well below $5 per bushel at harvest time this fall,” Willott said.

In 2002, U.S. farmers planted 73.8 million acres. With the current price signals, Willott expects U.S. farmers to scale back their indicated planting intentions.

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