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Market Commentary

Afternoon Comments 06/18


Although the U.S. soybean situation is very tight, nearby July CBOT futures declined in apparent response to an Oil World forecast of significant imports during early summer. In contrast, talk that global exports will be unable to meet demand later in the year, as well as news of a sizeable new-crop sale to China, supported the deferred contracts Tuesday. July soybean futures declined 1.75 cents to $15.1075/bushel as Tuesday trading wound down, whereas July soyoil slid 0.03 cents to 48.81 cents/pound; July soybean meal gained $2.7 to $451.8/ton.
Market Info

USB: Drought impacts U.S. soybean quality results

United Soybean Board  |   February 20, 2013
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According to a recent soy-checkoff-funded study, the overall oil levels in last year's U.S. soybean crop increased over the previous year, while average protein fell. United Soybean Board (USB) Customer Focus Action Team Chair Sharon Covert says U.S. soy's biggest users pay attention to those results.

"The oil and protein levels in our soybeans are very important to our customers," says Covert, a soybean farmer from Tiskilwa, Ill. "We should take every possible course of action to improve our soy oil and meal, which will help us protect and expand our markets."

The results of the soy checkoff's annual U.S. Soybean Quality Survey found the oil level in the overall U.S. soybean crop rose by 0.3 point to 18.5 percent last year. And protein dropped a half-point to 34.3 percent.

But for a crop baked by drought conditions for much of the year, that's pretty good, says the scientist in charge of the research.

Seth Naeve, Ph.D., who conducts the study, says the drought likely had a hand in holding protein levels down.

"Weather has a dramatic impact on soybean quality," says Naeve, an associate professor at the University of Minnesota. "Last year, the drought affected different regions differently, so we weren't exactly sure how quality would play out. Overall, I think we're happy that quality was as good as it was."

Beginning with the 2013 crop, the checkoff will be implementing a new program to monitor weather conditions in soybean test plots and correlate that information with quality outcomes and variety performance. This work will complement the Soybean Quality Survey.

The checkoff uses the survey to give buyers a preview of protein and oil levels. Naeve says he recently joined the U.S. Soybean Export Council in presenting the results to buyers in Asia, who want to know what U.S. farmers are doing to improve quality long-term.

Animal agriculture consumes nearly 98 percent of U.S. soy meal, feeding the protein-rich meal to poultry, swine, fish and other animals. The food industry, which uses nearly 70 percent of soy oil, depends on an abundant supply of healthy and functional oil to use as frying oil or as an ingredient in many food products.

Naeve says variety selection is a farmer's best tool to improve soybean quality - even during a drought.

"In general, the highest-protein varieties tend to be higher-protein in most environments," he says.

The 69 farmer-directors of USB oversee the investments of the soy checkoff to maximize profit opportunities for all U.S. soybean farmers. These volunteers invest and leverage checkoff funds to increase the value of U.S. soy meal and oil, to ensure U.S. soybean farmers and their customers have the freedom and infrastructure to operate, and to meet the needs of U.S. soy's customers.

As stipulated in the federal Soybean Promotion, Research and Consumer Information Act, the USDA Agricultural Marketing Service has oversight responsibilities for USB and the soy checkoff.


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