Global market and production factors not bullish for soybeans

U.S. farmers face complex challenges in 2025 that will have an impact on their income and financial stability, according to Matt Erickson, who spoke during December’s South Dakota AgOutlook in Sioux Falls. Erickson gave his views on an earlier edition of the South Dakota Soybean Network about how the farm economy will feel the impact of interest rates, tariffs and other macroeconomic factors. But farm income will also be affected by supply and demand forces on commodity markets, said Erickson, citing the World Agriculture Supply and Demand Estimates, which indicate a downward trend in projected soybean yields from 51.7 bushels to the acre to 50.7. Corn yields, while high, also came out lower than expected, said Erickson, who pointed out other market-moving production variables.

“I think the main thing here for 2025 is when you look at some of these metrics in the market, such as the soybean-to-corn price ratio, the market right now is just screaming ‘corn acres,’” said Erickson. “And you know, I think the big question’s going to be looking at the March Prospective Plantings report in terms of how many acres of corn a producer’s going to plant in 2025.”

That’s the first variable. The second variable, said Erckson, is the yield estimate for South America.

“All indications are pointing to South America having a record large soybean crop,” he said. “The fact of the matter is if you take Argentina and Brazil combined, from last marketing year to this marketing year it’s about a 10 percent increase in production, so a massive soybean crop from South America from those two countries.”

The other soybean-related supply and demand observation from Erickson is the world stocks-to-use ratio.

“There’s plentiful soybeans out on the global market,” said Erickson, adding, “Brazil is the cheapest export price for soybeans.”

On the other hand, Erickson said there is something to be learned from looking at what he refers to as the big four corn players, the U.S., Brazil, Argentina and Ukraine.

“If you take away the U.S. and you just look at Brazil, Argentina and Ukraine, we’re at the lowest stocks-to-use ratio since, I believe, 1983/84,” said Erickson. “So there’s just not a lot of corn that’s out on the global marketplace.”