The combination of the ongoing trade war, large carry-in stocks, fewer hogs in China and the potential shift of corn area to soybeans could result in a large abundance of soybeans, but this is far from certain given the severity of planting delays.

The U.S. Department of Agriculture’s May “World Ag Supply and Demand Estimates” (WASDE) report included a 4.1 billion bushel crop for 2019, but also included a recovery in U.S. soybean exports that remains far from certain. An alternative might be that 91 million acres of soybeans are planted with a lower yield of 45 bu/acre (due to excessively wet conditions), resulting in nearly the same level of production in the May WASDE. Without a trade agreement, the U.S. is able to export only 1.7 billion bushels, and we find ourselves with over 1.2 billion in ending stocks. The market’s reaction to delayed plantings for soybean prices has been positive so far, but this outcome could change quickly.