Upcoming trade negotiations between the U.S. and China in January and the possibility of trade conflict resolution rallied prices after the G-20 summit in Argentina. However, Todd Hubbs of the University of Illinois says changes in the export market look to be minimal in the months ahead, even with China buying more beans from the U.S.
“The potential for strong South American soybean export competition in the marketing year is the limiting factor in expanded U.S. soybean exports,” says Hubbs, an agricultural economist. “That’s in spite of any possible trade resolution with China.”
The USDA World Production report estimates crop production in the major South American soybean-producing countries to be 7.02 billion bushels. Hubbs says that forecast is likely lower than what the real final number will be, due in large part to optimum growing conditions in Brazil.
Overall, Hubbs says the prospects for a large South American soybean crop look very good, on top of an already excellent U.S. crop.