Fundamentally Speaking

KS & MO Soybean Planting Change in Acreage

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

The soybean complex has been reeling for a while with values falling close to five year lows weighed under by a host of bearish factors.

This includes a third consecutive year of record South American soybean production with estimates for both Argentina and Brazil continuing to rise.

Spreading bird flu in the U.S. has weighed on protein meal demand while reports circulate that China may default on some previously purchased soybean meal contracts.

Finally with U.S. planted acreage forecast at its highest levels ever, projected ending stocks for the upcoming year are pegged at ten year highs.

Some buoyancy has been seen in the complex recently fueled by an impressive rally in soybean oil that continues to respond favorably to last week's announcement by the EPA increasing the amount of bio-diesel that will be produced in this country.

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Ideas that palm oil output, the world's largest produced vegetable oil will be down if the emerging El Nino weather event results in less than favorable growing conditions in Indonesia and Malaysia, the two largest palm producing nations that in the past have seen adverse weather from El Nino events has added to the gains.

The one factor that we see as somewhat more serious is the ongoing wetness in areas of the Western Corn Belt, primarily in KS, NE, MO and IA that has delayed getting the last 20-25% of the U.S. intended soybean acreage in the ground.

This has some in the trade thinking that not only will 2015 domestic soybean area not rise significantly above what was indicated in the March Prospective Plantings report but final seedings may come in below the 84.6 million intentions.

Looking at the soybean planting progress as of May 31 the two most lagged states are Kansas at 21% complete vs the 63% five year average and Missouri at 23% complete vs. a 57% average.

The accompanying graphic shows soybean plantings in both states as of May 31 from 1986 to this year and then tracks the change in planted acreage from the March intentions to the final figures given in the annual production report released in January.

Though this year's seeding pace is well behind normal there have been other years where plantings have been tardier.

In 1990 only 9% of the intended MO soybean acreage had been planted yet final acreage was only 100,000 acres or 2.3% below the March intentions.

In 1993, the year of the great flood 5/31/93 soybean plantings for KS and MO were 18% and 28% respectively yet KS acreage was unchanged and MO saw a mere 50,000 acre decline.

The slowest year by far was in 1995 when only 4% and 8% of the KS and MO bean crops had been planted by the end of May yet KS acreage was down only 200,000 while MO actually saw a 100,000 increase.

While farmers in KS and MO may be getting antsy about getting their soybean crop finally planted, past history suggests that most will stick with their original planting intentions.

Furthermore the prevented planting provisions in their crop insurance is still ten days away, the forecasts are for clearer weather and neither state has to worry too much about the impact of an early fall freeze.

(KA)

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