As harvest continues to progress, farmers face the decision to sell or store soybeans. If soybeans are stored, farmers should evaluate the risks and rewards of holding soybeans priced or unpriced. Consideration should be given to both futures price risk and basis risk for individual locations. Holding soybeans in storage with no price protection is risky, as the value of the crop in storage has the potential to decline in value, while also incurring storage costs, such as interest. USDA projects Brazil’s soybean production to be a record crop of 6.2 billion bushels, up 10% compared to last year (USDA September 2024 WASDE). Brazil’s soybean planting season runs from September through December, with harvest occurring from January through May (USDA, FAS). As such, the price of U.S. soybeans held in storage will be strongly influenced by production risk during the growing season in South America.&nbsp;



Figure 1. Three soybean pricing scenarios in Memphis, TN as of Oct 3, 2024 



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2145" height="1430" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.3-1.png" alt="" class="wp-image-40627" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.3-1.png 2145w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.3-1-1024x683.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.3-1-768x512.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.3-1-1536x1024.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.3-1-2048x1365.png 2048w" sizes="(max-width: 2145px) 100vw, 2145px" /></figure>



This article examines three scenarios for pricing soybeans this fall.



<ol class="wp-block-list">
<li>Sell soybeans at the current cash price;</li>



<li>Store soybeans and establish a cash forward contract price for delivery in February; and</li>



<li>Buy a put option and sell a call option to fence in a futures price with delivery of soybeans to a cash market in February.</li>
</ol>



All futures market prices, premiums, and cash prices are for Memphis, Tennessee, as of October 3, 2024. Interest is assumed at an 8% rate.



In scenario one, the cash price was $10.21 (November Futures contract $10.46; negative basis of $0.25). This is the most straight forward scenario. The farmer sells soybeans and receives $10.21 (solid black line in Figure 1).



In scenario two, the farmer decides to store soybeans but wants to establish a price, so he enters a cash forward contract for delivery in February for $10.91. The interest cost to carry soybeans for four months is estimated at $0.27 ($10.21 x 8% x (4 months / 12 months)). Once delivered, the farmer receives $10.64 ($10.91 less $0.27 of interest expense; dashed black line in Figure 1).&nbsp;



In scenario three, the farmer stores soybeans for February delivery and buys a $9.80 March put option for $0.13 and sells a $12.00 March call option for $0.13, making the strategy premium neutral, without including transaction costs. This strategy has fenced in a futures price (does not include basis) between $9.53 and $11.73 (solid red line in Figure 1). Change in the March futures contract will determine the outcome. Positions in the futures market would be offset by cash sales. If March futures are below $9.80, assuming 0 basis, the producer will receive $9.53 ($9.80 less $0.27 in interest). For March futures prices below $9.80, the put option would be exercised, establishing a short position in the futures market for the farmer. If March futures are above $12.00, the producer will receive $11.73 ($12.00 less $0.27 in interest). For March futures prices above $12.00, the call option would be exercised, establishing a long position in the futures market for the farmer.&nbsp;&nbsp;March futures prices between $9.80 and $12.00 will result in cash prices between $9.53 and $11.73. March futures prices above $10.48 would provide a net price greater than the cash sale in scenario 1, and a March futures price above $10.91&nbsp;would provide a cash price greater than the storage with a cash forward contract in scenario 2. An additional benefit of the options strategy is that the farmer can set basis immediately or any time prior to delivery of the soybeans to the cash market. The dotted red lines in figure 1 show how a positive or negative $0.25 basis would affect the cash price received under the fenced in futures price scenario.&nbsp;



All three alternatives have advantages and disadvantages. Farmers need to determine their access to storage, price risk tolerance, and expectations for futures prices and basis for their market to evaluate which strategy is right for their operation.



References



Barchart.com. Soybean Futures and Options Prices and Premiums.&nbsp;<a href="https://www.barchart.com/futures/quotes/ZS*0/futures-prices?viewName=main">https://www.barchart.com/futures/quotes/ZS*0/futures-prices?viewName=main</a>



USDA Foreign Agricultural Service. Country Summary. Brazil Soybean Area, Yield and Production.&nbsp;<a href="https://ipad.fas.usda.gov/countrysummary/Default.aspx?id=BR&amp;crop=SoybeanUSDA">https://ipad.fas.usda.gov/countrysummary/Default.aspx?id=BR&amp;crop=SoybeanUSDA</a>USDA September 2024 WASDE Report.&nbsp;<a href="https://www.usda.gov/oce/commodity/wasde">https://www.usda.gov/oce/commodity/wasde</a>

A Soybean Pricing Alternatives at Harvest

The beef cow inventory is at a sixty-three-year low. Tight supplies have driven cattle markets and calf prices have increased by roughly $1 per lb over the last two years. Limited heifer retention and beef cow slaughter exceeding 10 percent of beef cow inventory for the year indicate that beef cow numbers will be even lower in 2025. Cowherd expansion will happen eventually but, there appears to be little evidence that producers have an appetite for that currently. For the cow herd to grow, we need to have the 3 Ps of herd expansion at the cow-calf level: profit, pasture, and patience.



The first P is probably the most obvious – profit. There will be no interest in cowherd expansion without money being made at the cow-calf level. While profit has been there recently, it is important to remember that these strong calf price levels are relatively new. We actually went from November 2015 to February 2023 (7 years and 4 months) with the state average price of a 550 lb medium / large frame #1-2 steer in Kentucky being under $2 per lb. Coming out of that challenging 7-year period, I think a lot of cow-calf operators have been cautious and guarded. Just as importantly, a lot of costs are substantially higher now than they were ten years ago, so comparing current calf prices to historical calf prices is misleading. Still, I think current returns at the cow-calf level are sufficient to see heifer retention if the other two Ps fall into place.



The second P is pasture, and I am using pasture broadly to describe forage/feed availability. While profit may be the first driver of expansion, no level of profit can make it rain, and limited pasture and hay supplies can nix any interest in expansion. As a recent example, drought was so widespread in the US during 2022 that expansion would have been highly unlikely, regardless of calf price levels. Both hay supplies and pasture and range conditions have improved since 2022, but a lot of areas have been dry this year, including my home state of Kentucky.&nbsp;



The final P is patience, and I think this may be the one that is most lacking in the cattle industry right now. When a farmer decides to expand the size of their cowherd, they are trading income from the sale of heifers today for a stream of income from additional calf sales in the future. Weaned heifers are valuable in 2024 and passing up that income in the short run is difficult. Developing heifers is also costly and is an expense that is incurred well before additional calves can be sold. These same factors were largely present when our last expansion began in 2015, but interest rates were considerably lower than they are today. Higher interest rates increase&nbsp;the&nbsp;cost of production and also increase the preference for income today, rather than in the future. Put another way, patience is at a premium in higher interest rate environments like the present.



At some point, the three Ps will line up and herd expansion will start. When that will happen is a difficult question to answer, but it is safe to say there are no signs of heifer retention right now. Limited heifer retention, combined with cow slaughter levels, suggest that another decrease in beef cow inventory is almost certain when the January 2025 estimates are released. So, supply fundamentals are encouraging and should continue to support calf prices next year. Many are also expecting some reductions in interest rates over the several months, which may factor into this decision at the producer level.&nbsp;



If weather cooperates, I do think increased heifer retention could be seen in 2025, but it is important to remember that this would just be the first step towards expansion. And the initial impact of heifer retention is actually a tightening of calf markets as those heifers are held back. There are always risk factors out there, but I remain optimistic about the next couple of years largely because cattle supplies are tight and likely to get tighter. We are not seeing signs up expansion yet, so all we can do is watch for the 3 Ps!



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2044" height="1164" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-1.png" alt="" class="wp-image-40620" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-1.png 2044w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-1-1024x583.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-1-768x437.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-1-1536x875.png 1536w" sizes="(max-width: 2044px) 100vw, 2044px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1961" height="1173" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-2.png" alt="" class="wp-image-40621" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-2.png 1961w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-2-1024x613.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-2-768x459.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-2-1536x919.png 1536w" sizes="(max-width: 1961px) 100vw, 1961px" /></figure>


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<figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="468" height="263" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.41.2-3.png" alt="" class="wp-image-40622"/></figure></div>


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Burdine, Kenny. &#8220;<a href="https://southernagtoday.org/2024/10/01/the-three-ps-of-herd-expansion-profit-pasture-and-patience/">The Three Ps of Herd Expansion: Profit, Pasture, and Patience.</a>&#8221; Southern Ag Today 4(41.2). October 8, 2024. <a href="http://the-three-ps-of-herd-expansion-profit-pasture-and-patience">Permalink</a>

The Three Ps of Herd Expansion: Profit, Pasture and Patience

This time of year is busy as summer comes to a close, children have returned to school, harvest is in full swing, and we anticipate busy days in the fall and winter months. Another item for your to-do list is meeting with your tax professional. This appointment is often scheduled for the early part of the year, but there can be advantages to carving out some time now.&nbsp;



One of the main advantages is that even though a large majority of the year has passed, there is opportunity for tax planning and management relative to where things currently stand. This allows you (or you and the preparer together) to determine what you would like to see happen by the end of the year.&nbsp;



If it is a lower-income year so far, consider making additional sales to generate revenue when your income tax rate is lower. This could include making sales of business assets you are considering disposing of as the depreciation recapture or possible capital gains treatment rates could be lower. For expenses, we often think about taking as much expense as possible, but if income is already low, it may be advantageous to save those expenses for another time period. This may mean using depreciation sparingly, not pre-paying farm expenses, or otherwise cutting back on discretionary farm expenditures.



In times of high income, the opposite strategies would be appropriate. We may hold off on making additional sales during the year to slow down revenue recognition. This could include installment sales, deferred payment contracts, deferring any disaster payments, and holding off on selling any assets from the business. To lower our taxable income, we may look to recognize additional expenses through depreciation, pre-paid inputs, or otherwise try to find ways to re-invest in the business or take personal deductions. If high income still seems likely,&nbsp;<a href="https://extension.usu.edu/ruraltax/tax-topics/ScheduleJ">Schedule J income averaging</a>&nbsp;may be another tax planning opportunity for the farm.



A tax preparer may also clean up your business’ accounting records. Generally, late fall would be a slower time for CPA and accounting firms, which may provide focused attention on your operation when things are not so hectic. Again, getting a clear picture of revenues and expenses at this stage can help with decision-making, tax or otherwise. For a preparer, clients who are easy to work with and make the business run smoother are going to receive better outcomes and better service. Likely, you have ideas or plans between now and the end of the year. Sharing those with your tax advisor can alert you to any possible negative tax outcomes. Too often, preparers get a call after the fact, making the accounting/tax work more difficult and more expensive for you.&nbsp;



Each year will be unique, with new challenges and new opportunities.&nbsp;&nbsp;Spending a bit more time communicating with your preparer, especially before year-end, may pay dividends for all involved.&nbsp;&nbsp;



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Burkett, Kevin. &#8220;<a href="https://southernagtoday.org/2024/10/01/preparing-for-your-preparer/">Preparing For Your Preparer</a>.&#8221; Southern Ag Today 4(41.1). October 7, 2024. <a href="http://preparing-for-your-preparer">Permalink</a>

Preparing For Your Preparer

The Food and Agriculture Organization (FAO) of the United Nations defines a person as food insecure if s/he “lacks regular access to enough safe and nutritious food for normal growth and development and an active and healthy life.” According to the U.S. Department of Agriculture&#8217;s (USDA) 2023 report on&nbsp;Household Food Security in the United States, 13.5% of households—approximately one in seven—experienced food insecurity (Rabbitt et al. 2023), underscoring the continued prevalence of this issue nationwide. Food insecurity exhibited an upward trend from 12.8% in 2022, reflecting a growing number of households with limited resources and chronic health conditions, among other factors.&nbsp;



The Southern region faced higher food insecurity rates (14%) compared to the national average of 12.2% between 2021 and 2023 (see Figure 1). Only five of the thirteen Southern states fell below the national average: Florida (12.0%), Tennessee (11.7%), Alabama (11.5%), North Carolina (10.9%), and Virginia (10%). Arkansas ranked as the most food-insecure state in both the Southern region and the nation, with a rate of 18.9%. The state’s food insecurity rate has steadily increased since 2020, reflecting significant challenges many Arkansan households face in accessing adequate food. According to Feeding America, more than 560,000 Arkansans experienced food insecurity in 2022, with approximately 24% of those affected being children. Other Southern states with food insecurity rates above the national average include Texas (16.9%), Mississippi (16.2%), Louisiana (16.2%), Oklahoma (15.4%), Kentucky (14.5%), South Carolina (14.4%), and Georgia (12.8%).



It is important to address a lack of sufficient access to food due to its negative impact on health, which leads to poor productivity and lower overall economic growth and development. This is especially important given the increasing risk of food insecurity from greater uncertainty in global developments, such as wars in various parts of the world. These conflicts have disrupted food supplies in the US and worldwide (Filho et al. 2023; Kemmerling et al. 2022). Furthermore, higher domestic food prices and reduction in overall economic activity make it more difficult for low-income households to achieve food security (Elmes 2016).&nbsp;



To address this issue, the federal Supplemental Nutrition Assistance Program (SNAP) provides temporary assistance to help households purchase food until they regain financial stability. Non-profit organizations, such as food banks and food pantries, also play an important role in local communities. Sustainable efforts to reduce food insecurity must be intensified. Prospects for improving long-term food security are tied to the same economic factors that influence household income and budgeting, especially those connected to labor productivity and wages (LeBlanc et al. 2005). Efforts of this nature generally require the collaboration of community stakeholders to ensure a resilient economy, so that the benefits reach all community members.



Figure 1. Prevalence of Household Food Insecurity by State, average 2021-2023


<div class="wp-block-image">
<figure class="aligncenter size-full is-resized"><img loading="lazy" decoding="async" width="451" height="240" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.5.png" alt="" class="wp-image-40610" style="width:645px;height:auto"/><figcaption class="wp-element-caption">Source: Visualized by authors using USDA, Economic Research Service using data from U.S. Department of Commerce, Bureau of the Census, 2021, 2022, and 2023 Current Population Survey Food Security Supplements.</figcaption></figure></div>


References



Elmes, M. B. 2018. Economic Inequality, Food Insecurity, and the Erosion of Equality of Capabilities in the United States.&nbsp;Business &amp; Society&nbsp;57(6): 1045-1074.&nbsp;<a href="https://doi.org/10.1177/0007650316676238">https://doi.org/10.1177/0007650316676238</a>



Filho L. W., M. Fedoruk, JH Paulino Pires Eustachio, J. Barbir, T. Lisovska, A. Lingos, and C. Baars. 2023. How the War in Ukraine Affects Food Security.&nbsp;Foods. 12(21): 3996.&nbsp;



Kemmerling, B., C. Schetter, and L. Wirkus. 2022. The logics of war and food (in)security.&nbsp;Global Food Security&nbsp;33.&nbsp;<a href="https://doi.org/10.1016/j.gfs.2022.100634">https://doi.org/10.1016/j.gfs.2022.100634</a>.



LeBlanc, M., B. Kuhn, and J. Blaylock. 2005. Poverty amidst plenty: food insecurity in the United States.&nbsp;Agricultural Economics&nbsp;32(s1): 159-173.



Rabbitt, M. P., Reed-Jones, M., Hales, L. J., &amp; Burke, M. P. (2024).&nbsp;Household food security in the United States in 2023&nbsp;(Report No. ERR-337). U.S. Department of Agriculture, Economic Research Service.



Feeding America,&nbsp;Food Insecurity among the Overall Population in Arkansas, Retrieved September 27, 2024, from&nbsp;<a href="https://map.feedingamerica.org/county/2022/overall/arkansas">https://map.feedingamerica.org/county/2022/overall/arkansas</a>



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Thomas, Chrystol, and An-Ting Liao. &#8220;<a href="https://southernagtoday.org/2024/10/01/the-food-insecurity-challenge-a-snapshot-of-the-southern-u-s/">The Food Insecurity Challenge: A Snapshot of the Southern U.S.</a>&#8221; Southern Ag Today 4(40.5). October 4, 2024. <a href="http://the-food-insecurity-challenge-a-snapshot-of-the-southern-u-s">Permalink</a>

The Food Insecurity Challenge: A Snapshot of the Southern U.S.

In&nbsp;<a href="https://southernagtoday.org/2024/09/02/shifting-winds-the-changing-landscape-of-cotton-production-and-exports-in-the-u-s-and-brazil-part-1/">Part 1,</a>&nbsp;we examined the importance of international markets for cotton growers amid a significant decline in U.S. cotton processing capacity. Since 1995, U.S. cotton mill use has plummeted by 84%, reaching 1.85 M bales in the 2023 crop season—the lowest level in over a century. During this period, Brazil’s production surged, enabling it to surpass the U.S. in cotton exports. In this second part, we briefly analyze yield and production trends in both countries, exploring their potential impact on future exports.



After the World Trade Organization (WTO) Agreement on Textiles and Clothing (ATC) came into effect in 1995, U.S. cotton production averaged 17.1 million bales annually. For the 2024/25 crop season, the USDA estimates production at 14.5 million bales (Fig. 1), reflecting an improvement over the past two years. However, untimely rains have hindered optimal crop development in Texas, the largest cotton-producing state. In 2023, Brazil outpaced the U.S. in cotton production (Fig. 1), with USDA forecasting a harvest of 16.7 million bales for the 2024/25 crop season &#8211; nearly nine times the amount produced in 1995. This growth in Brazil is primarily due to land expansion and yield improvements.



Figure 1 – Cotton Production in the U.S. and Brazil: 1960 – 2024. 



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1430" height="546" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-1.png" alt="" class="wp-image-40601" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-1.png 1430w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-1-1024x391.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-1-768x293.png 768w" sizes="(max-width: 1430px) 100vw, 1430px" /><figcaption class="wp-element-caption">Notes: ATC: Agreement on Textiles and Clothing. 2024 are estimated values.  Source: FAS/USDA/PSD. </figcaption></figure>



Brazil’s cotton acreage has expanded by 71% since 1995. Most Brazilian cotton is grown as a double crop, following soybean harvest. Cotton competes for land with corn, allowing farmers to benefit from fiber-food diversification. This year, low corn prices prompted growers to shift more acreage to cotton, resulting in a 16.8% increase in planted area.&nbsp;



Post-ATC, Brazil began outperforming the U.S. in cotton yield. Enhanced farming practices and the introduction of transgenic cotton seeds in the late 2000s significantly boosted productivity. Brazilian yield soared from 323.9 lbs./ac in 1995 to 1,705 lbs./ac in 2023 &#8211; a fivefold increase. In contrast, U.S. cotton yields have plateaued around 846.5 lbs./ac since 2004 (Fig. 2), a notable achievement considering the challenging weather conditions faced by U.S. producers.&nbsp;&nbsp;



Figure 2 – U.S. and Brazil Cotton Yields. 



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1430" height="537" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-2.png" alt="" class="wp-image-40603" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-2.png 1430w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-2-1024x385.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.4-2-768x288.png 768w" sizes="(max-width: 1430px) 100vw, 1430px" /><figcaption class="wp-element-caption">Notes: ATC: Agreement on Textiles and Clothing. 2024 are estimated values.  Source: FAS/USDA/PSD. </figcaption></figure>



Brazil&#8217;s soil and climate favor cotton expansion, signaling a promising export future. However, the profitability of second-season corn often influences farmers&#8217; decisions to plant cotton. Expanding cotton beyond traditional areas is limited by the need for specialized infrastructure, such as cotton gins and storage facilities. Moreover, cotton demands more sophisticated technology and a longer growing season than corn, adding climatic risk to production. Despite these challenges, Brazil has made notable progress. In 2023, the country achieved a milestone by exporting cotton to Egypt, showcasing the enhanced quality of its fiber. Additionally, a new export route through the port of Salvador, strategically closer to the key cotton region of western Bahia, was established to alleviate bottlenecks at Santos, Brazil’s main export hub.



Brazil is poised to contend for the top position in global cotton sales. Preliminary analysis indicates that cotton remains more profitable than corn in the country. Despite narrowing margins for Brazilian cotton producers, a modest increase in acreage is expected for the next cycle. Cotton prices on ICE Futures in New York have fallen by 20% since February, now trading around $0.70 per pound. Meanwhile, the dollar’s 12% appreciation against the Brazilian real has bolstered Brazil&#8217;s price competitiveness, mitigating the impact of falling cotton prices in the country. Although recent droughts in the U.S. have curtailed production, Brazil’s surging output has halted the effects on global prices. Monitoring Brazil’s cotton market provides valuable insights into global price trends and affects marketing strategies for Southern U.S. growers.



References.&nbsp;



FAS/USDA/PSD. PSD Data Sets.&nbsp;Retrieved from:&nbsp;<a href="https://apps.fas.usda.gov/psdonline/app/index.html#/app/home">https://apps.fas.usda.gov/psdonline/app/index.html#/app/home</a>[Accessed September 18, 2024].



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Cali, Yuri, and Rachel Judd. &#8220;<a href="https://southernagtoday.org/2024/10/01/shifting-winds-the-changing-landscape-of-cotton-production-and-exports-in-the-u-s-and-brazil-part-2/">Shifting Winds: The Changing Landscape of Cotton Production and Exports in the U.S. and Brazil (Part 2)</a>.&#8221; Southern Ag Today 4(40.4). October 3, 2024. <a href="http://shifting-winds-the-changing-landscape-of-cotton-production-and-exports-in-the-u-s-and-brazil-part-2">Permalink</a>

Shifting Winds: The Changing Landscape of Cotton Production and Exports in the U.S. and Brazil (Part 2)

As soybean prices for U.S. producers deteriorate, they face fierce competition from greater Brazilian production in the export market. USDA-WASDE projects the 2024/25 average farm price to be down $3.40 from two years ago, at $10.80 per bushel. U.S. soybeans&nbsp;rely heavily&nbsp;on the export market;&nbsp;on average, 47% of U.S. soybeans were exported in&nbsp;the previous five years. For over a decade, Brazil has maintained its position as the world’s largest soybean exporter, and in recent years, it has further expanded its global market share (Figure 1). USDA-WASDE projections for the 2024/25 marketing year estimate Brazil will account for 58% of global soybean exports, with the United States trailing at 28%. The remaining 14% will come from other exporting nations. While Brazil&#8217;s share has dipped slightly from last year’s peak of 59%, it continues to dominate the global soybean export market.&nbsp;



The U.S. soybean market is facing challenges with Brazil strengthening its position as China&#8217;s primary supplier. China has been working to become less dependent on U.S. soybean purchases, and increased production has allowed Brazil to become the preferred trading partner. According to the Foreign Agricultural Service’s Beijing post, in the first nine months of the 23/24 marketing year, the U.S. accounted for 26 percent of China’s soybean imports, compared to 69 percent from Brazil. Reports also indicate that China is dealing with an oversupply of soybeans, as recent high purchases come during subdued feed demand. This fact has hampered sales to China as we enter the peak marketing season for U.S. soybeans. While U.S. sales to China have risen recently, they are still trailing behind last year&#8217;s sales and the five-year average. As of the week ending 9/19/24, the total soybean commitments to China totaled 6.8 million metric tons, compared to 7.4 million for the same time last year and the five-year average of 10.6 million.&nbsp;&nbsp;



&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The export outlook for U.S. soybeans is further complicated by the prospect of low river levels on the Mississippi River, a concern highlighted in last week’s article &#8220;Low River Levels on the Mississippi River: Not the Three-peat We Want&#8221; (<a href="https://southernagtoday.org/2024/09/25/low-river-levels-on-the-mississippi-river-not-the-three-peat-we-want/">southernagtoday.org</a>). Recent rainfall from Hurricane Helene has improved the river situation, as the Mississippi River at Memphis is expected to rise above the low river threshold. Without a positive shift in the current export scenario, U.S. producers face lower prices as they harvest a record soybean crop. With Brazil now dominating the export market, the potential for price increases this year depends heavily on the progress of Brazil’s soybean planting season. Although Brazil has just entered its planting window, dry conditions in the central region could lead to delays. If drought conditions develop, it could create an opportunity for higher prices for U.S. producers. Current forecasts call for rain over the next couple of weeks, but rainfall remains below normal.&nbsp;&nbsp;



Figure 1. Share of Global Soybean Exports by Country, 2010-2025



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2172" height="1306" src="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.3-1.png" alt="" class="wp-image-40595" srcset="https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.3-1.png 2172w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.3-1-1024x616.png 1024w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.3-1-768x462.png 768w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.3-1-1536x924.png 1536w, https://sat-wp.afpc.tamu.edu/wp-content/uploads/2024/10/4.40.3-1-2048x1231.png 2048w" sizes="(max-width: 2172px) 100vw, 2172px" /><figcaption class="wp-element-caption">Source:  https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery</figcaption></figure>



References&nbsp;



United States Department of Agriculture, Foreign Agricultural Service. Oilseeds and Products Update: Beijing, China &#8211; People&#8217;s Republic of China. CH2024-0116, 2024, https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Beijing_China%20-%20People%27s%20Republic%20of_CH2024-0116.



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Maples, William E. &#8220;<a href="https://southernagtoday.org/2024/10/01/brazil-expected-to-continue-dominance-of-global-soybean-exports/">Brazil Expected to Continue Dominance of Global Soybean Exports.</a>&#8221; Southern Ag Today 4(40.3). October 2, 2024. <a href="http://brazil-expected-to-continue-dominance-of-global-soybean-exports">Permalink</a>

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