For 2016-17, Agriculture and Agri-Food Canada expects soybean production to decline to 6.2 Mt. This follows a rise in planted area to 2.2 million hectares, just 40,000 hectares short of the 2014-15 record. However, this rise in area was partly offset by a marginal decline in yields.
Supplies are forecast to fall due to the sharp drop in carry-in stocks and the decline in production and imports. Domestic crush is forecast to rise slightly, setting a new record, on support from attractive crush margins, large available supplies and adequate crush capacity. Canadian oilseed processors are currently operating at slightly above 50% capacity compared to nearly 60% of capacity one year ago at this time.
Exports are expected to decline slightly from last year on tighter domestic supplies. Soybean exports are expected to be larger than exports of oats, barley or corn but smaller than durum. Shipments are expected to be widely dispersed by country.
Soybean prices are forecast to increase from last year to $430 to $470/t. Support for Canadian soybean prices is provided by a slight strengthening of USDA’s estimated weighted farm price and by the stable Canada-U.S. exchange rate. The Canadian dollar has maintained a value of around US$0.75 since the start of the 2015-16 crop year. With crude oil prices at $45 to $50 a barrel, the outlook is for exchange rates to continue trading near current levels providing extra stability for Canadian soybean prices.
At the world level, the outlook for soybeans is pressured by the USDA’s outlook for a record 4.3 billion bushel (Bbu) soybean crop compared to the previous record of 3.9 Bbu. The USDA is expecting US 2016-17 soybean supplies to be 356 million bushels (Mbu) above the previous year levels. This accounts for over half of the growth in world soybean supplies for 2016-17.
The growth in supply is being matched by rising demand. USDA’s latest estimate shows world usage of oilseed products rising by 21 Mt, to a record 504 Mt.
(Source: Outlook for Principal Field Crops, Oct. 21, 2016)