China’s insatiable appetite for soybeans will continue to provide support for the oilseed crop through the next year.
It will also be the catalyst for soybean acreage to surpass corn for the first time in 2018, says Bill Lapp, president of Advanced Economic Solutions. He shared his oilseed outlook during a panel discussion at the Grain World conference in Winnipeg, Manitoba last week.
Lapp says the 2017 U.S. soybean crop certainly surpassed expectations and the trade will be living with large supplies through the next 12 months. But soybeans and soybean meal have been strongly supported by Chinese demand. “We are looking at plus or minus $9.50 per bushel for the nearby futures. This has been a surprise to many analysts for several years as we’ve had bigger and bigger supplies and yet the price has not collapsed,” says Lapp.
“With the kind of supplies we have now you could justify a soybean price well below $9.00, but I don’t think we’re going to see that… due to continued growth in imports from China over the next year and beyond.”
In this interview, Lapp tells Grain Perspectives’ Matthew Pot that he expects some reduction in corn acreage and a marginal increase for soybeans in 2018. “With the supplies we have, I don’t think we need more acres of either crop, but with the price relationships farmers do have incentive to expand soybean acres from even where they are right now.”
Lapp also shared his perspective on the palm oil market as well as how proposed U.S. biofuel policy changes could dramatically impact markets and soybean oil over the next year.
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