Soybean production in the U.S. for 2023-2024 has been forecast lower, down 95 million bushels at 4.2 billion bushels, according to the Aug. 11 World Agricultural Supply and Demand Estimates (WASDE) report from the U.S. Department of Agriculture.

U.S. soybean supply and use changes for 2023-2024 include higher beginning stocks and lower production and exports. Beginning stocks are raised on higher 2022-2023 imports. Harvested area has been forecast at 82.7 million acres, unchanged from July’s WASDE report.

The first survey-based soybean yield forecast of 50.9 bushels per acre has been reduced 1.1 bushels from last month. Soybean supplies for 2023-2024 are projected at 4.5 billion bushels, down 2 percent from last year, the report indicated. With soybean exports down 25 million bushels on lower supplies and crush unchanged, ending stocks are forecast at 245 million bushels, down 55 million from last month.

The U.S. season-average soybean price for 2023-24 has been forecast at $12.70 per bushel, up $0.30 from last month. The soybean meal price has been forecast at $380 per short ton, up $5.

The soybean oil price forecast has increased to 62 cents per pound, up 2 cents.

The 2023-2024 foreign oilseed supply and demand forecast includes lower exports, reduced crush and higher ending stocks, the report noted.

Global soybean exports are reduced 0.5 million tons to 168.8 million on lower U.S. exports.

Soybean crush and imports are reduced for Bangladesh, Egypt and Pakistan, in line with downward revisions in the prior marketing year. Global soybean ending stocks are reduced 1.6 million tons to 119.4 million, mainly on lower U.S. stocks, according to the August WASDE report.

Grant Kimberley, senior director of market development for the Iowa Soybean Association, said the latest USDA crop report surprised many with a sizable reduction in acres planted to soybeans, more than anyone expected. Stocks also appear to be tight moving forward, he noted.

“The supply estimate of 185 million bushels is lower than the last estimate and the demand side lowered that a little bit after we started seeing a rash of new crop sales on the books, some to China, Mexico and other areas. The USDA is projecting exports down a little bit to China, but things might be getting a little bit better,” Kimberley said.

Crop conditions dropped 2% for soybeans recently, which damaged the crop’s overall condition report nationwide.

“We really do need some rain, which is in the forecast, but it isn’t widespread. We’ll have to wait and see as we need a lot of rain. The second half of July was bone dry. That impacted corn but now it’s starting to impact soybeans,” Kimberley said. “Some rain in August can make a big difference. We really need three significant rainfall events in August to keep that bean yield potential up there. It can’t be three little rains — it needs to be widespread across the state and beyond.”

Demand for soybeans from China has begun picking up again, Kimberley said, and more demand should be coming in the near future.

“They’re overproducing pork for the market and their economy is still struggling as they come out of COVID lockdowns. In time, that should turn around, but we’ll just have to wait and see,” Kimberley said. “The United Soybean Export Council has soy sustainability assurance protocol and that’s helping build preferences for U.S. soybeans. We’ll have more meal to export after two more crush plants come online in the next few years, too.”

As far as storage, reports indicate there’s more on-farm storage available heading into harvest, Kimberley noted.

Chad Hart, Iowa State University Extension economist, said since August is the setting stage for soybeans, the scattered rain showers could be more beneficial for beans.

“There’s significant downward pressure for soybeans. The last three years, we’ve seen beans slide down into the high 40s/low 50s range, and we’ll probably end up with somewhat similar yields this year,” Hart said.

Christopher Pudenz, economics and research manager/economist at the Iowa Farm Bureau Federation, said that with soybean acres are down substantially compared to last year, the markets spurred a futures rally of $1 per bushel for the futures market. Nationally, soybean crop conditions aren’t looking much better than the corn crop with the USDA reporting 52 percent good to excellent, down 10 percent from the previous year. Iowa’s soybean crop was rated 55 percent good to excellent, down from 69 percent.

“The culprit is the drought. The crop’s condition being rated substantially worse this year than last year is something to watch going forward. Soybean yields do take a hit from the drought,” Pudenz said. “On the demand side of things, the USDA’s first of June soybean stocks estimate was a 23% decrease year-over-year from June 2022 and that was driven in large part by a 28% decline in off-farm storage, so stocks levels at this point are similar to the levels in the mid-2010s.”

A bright spot, Pudenz noted, is that the renewable diesel industry will have a sizeable impact on the market going forward.