Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana   
August 31,  1969
THE SOYBEAN MARKET SITUATION
by J. W. Uhrig, Agricultural Economics
Plentiful supplies of soybeans from the expected
billion bushel 1969 crop plus record carryover supplies will keep pressure on soybean prices during
the coming marketing year. The loan rate ($2.25
national average) will provide incentive for farmers
to place large amounts of soybeans under the loan.
Harvest-time prices in Indiana are expected to average 10 to 20 cents per bushel below the loan rate,
depending upon the location in the State.
1968-69 Crop Year in Review
Total disappearance of soybeans for the 1968-69
marketing year rose about 4.5 per cent above the
900 million bushel level of 1967-68 crop year. This
resulted in utilization of about 940 million bushels
and 305 million bushels carryover stocks on September 1. Carryover stocks are at an all time record,
up sharply from the previous record of 166 million
bushels of a year earlier. A substantial part of the
carryover will be held by CCC or under reseal. A
2.5 per cent increase in the domestic crush and an
increase of around 9 per cent in exports worked
down the record large supplies available at the start
of the season.
1969 Crop Prospects
The USDA August 1 Crop Report forecast soybean production at 1,061 million bushels, 2 per cent
smaller than last year's record production. Planted
acreage was reported at 42.4 million acres. Acreage
for harvest was placed at a record 41.6 million acres,
up 2.5 per cent from last year. The indicated national
average yield is 25.5 bushels per acre compared to
the record of 26.6 last year and a 5 year average
of 24.75 bushels. Changes in the production estimates between August 1 and the final crop estimate
in December have averaged 24 million bushels for
the past decade—ranging from 2 million to 68
million bushels. A one-bushel change in average
yields would change soybean production by 41.6
million bushels, or about 4 per cent.
A record soybean crop is in prospect for Indiana
farmers. The 1969 soybean acrage at 3.1 million is
up 61,000 acres. The August 1 estimate of 31 bushels
per acre is one half bushel under last year's record
yield. Because of the increased acreage, total production is forecast at 96.2 million bushels vs. 95.9
million in 1968.
Increased Utilization Expected
The lower loan rate on the 1969 crop and lower
prices should cause an increase in usage of soybeans. Both the export trade and domestic usage
are expected to increase. A 5 per cent increase in
the crush (to 620 million bushels) and a 7 per cent
increase in exports (to 310 million bushels) is projected. On this basis, total soybean usage would
approach one billion bushels, an increase of about
50 million bushels from last year. If the projected
production and utilization are realized, carryover
supplies would increase about 70 million bushels by
September 1970.
For soybean meal to be competitive with other
high protein meals, some of the reduction in the
soybean price is expected to result in lower meal
prices. Total domestic soybean meal supplies for the
1969-70 marketing year are expected to surpass
15 million tons, up about 4.5 per cent.
World vegetable oil supplies, including soybean
oil are expected to be 3 to 4 per cent higher than
this past year. Based on a crush of 620 million
bushels and carryover supplies of soybean oil projected at 370 million pounds, total soybean oil supplies for the year ahead should be around 6.9 billion
pounds, up about 2 per cent.
Government Price Supports
The price support for 1969 crop soybeans is $2.25
per bushel, for No. 1 grade soybeans, compared with
the 1968 crop rate of $2.50 per bushel, No. 2 grade.
The new support represents a net reduction of about
30 cents a bushel from the 1968 support rate since
No. 2 grade soybeans usually sell about 5 cents per
bushel below No. 1. The shift from No. 2 to No. 1
grade was made on the basis of simplifying CCC
loan operations and making loan pricing more comparable with trade practices.
The reduction of the soybean support price was
enacted to curtail increases in production and to
maintain competitiveness of soybeans in the world
markets.
Producers can receive price support on 1969 crop
soybeans through farm and warehouse storage loans
and purchases, either as individuals or through CCC
approved cooperative marketing associations. Loans
will be available up to one month prior to the June
30, 1970 maturity date.
Soybeans planted on feed grain base acreage by
1969 program participants will not be eligible for
feed grain price-support payments.