Fundamentally Speaking

Soybean futures have posted fairly large declines over the past week, yet crush margins have continued to contract while each day brings more confirmation that Brazil will be harvesting a record soybean crop.

Without a doubt, this will weigh on our exports sales for the rest of this marketing year and well into the 2023/24 season.

Similar to our piece on corn earlier in the week, this graphic shows U.S. soybean export sales and shipments as of the second week of April in million bushels (mb) on the left-hand axis and as a percent of the April WASDE projection on the right-hand axis.

We also report the percent change in U.S. soybean exports from the April WASDE to the final number which are the figures in the yellow rectangles.

Last week's export sales report indicated 1.851 billion bushels (bb) sold for the year which is about 11.8% below the year ago figure, yet the April WASDE projection of 2.015 bb is down only 6.6% from the year ago final sales of 2.158 bb.

The 1.851 bb sold is 91.8% of the April WASDE projection, below the ten-year average of 95.8% and actually the third lowest amount of soybeans sold as of the second week of April as a percent of that month's WASDE projection since the 2006/07 marketing year.

Meanwhile the 1.702 bb shipped is actually the third highest volume ever and at 84.5% of the April WASDE projection is above the ten-year average of 83.0% shipped.

We should note that the only two years since the 2006/07 season where the amount of soybeans sold as of the second week of April as a percent of the April WASDE projection was lower than this year came in 2018/19 and the following year at 86.8% and 77.9%.

Final soybean exports were 122 mb lower than the April WASDE in 2018/19 and 96 mb below in 2019/20, but any reduction in this year's overseas sales projection if it occurs should be more modest.

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