Dr' Robert Wisner: Soybean Outlook,

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Dr. Robert Wisner Soybean Outlook,
2006-07 and beyond 8/14/06
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Who is Right? Grain Analysts or the Futures
Market?

• Strong old-crop prices despite very large 06
  Proj. 07 carryover stocks
• Failure of Asian rust to be a US problem
• Large market carry to 2007 2008
• Market drivers corn to cut bean acres, plantings
  decline in Brazil
• Global biofuels
• SBO to become energy commodity?

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Mato Grosso Do Sul
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1971
1967
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Risk to 5.20-5.35
Nov. 06 Soybean Futures, 8/14/06
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World Supply Changes 06-07 Vs. Last Year
Aug. 06, WAOB, July FAS, USDA
Usage Increase

• Soybeans 0.9 2.7
• U.S. 3.0 5.8
• All Oilseeds -0.01 2.5
• Major Veg. oils Jul. forecast 3.5 5.0
• Major Oil meals 3.5 2.2
• Rapeseed prodn -3.8
• Sunflower prodn -3.5
• Cottonseed prodn 0.7
• Palm oil prodn 5.7

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Forecast 2006
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Soybean Outlook

• S.America 06-07 crop up 66 mil. Bu.
• Projected 5-8 drop in Brazil Soy Acres,
  Argentina up slightly
• BioDiesel
• China EU Demand?
• Asian Soy Rust bird flu?

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(Both Down)
(Brazil Down, Arg. up)
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Includes 05-06 projections
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350 Mil. Gal Biodiesel by 2010 From virgin SBO
Crushings if oil is driver vs. meal demand
driving crush
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Weeks Stks.
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Negative reserve lt normal pipeline supply
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Incentives to Cut Soybean Acres?
2009
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Incentives to Cut Soybean Acres?
Projection to 2008-09
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Crop Vegetative Index 7/21-31/06 vs. a year
earlier Yellow Brown areas are worse than yr.
ago, green is better.
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Key Developments to Watch

• Bird Flu
• S. America rust, weather, acres
• Index funds
• U.S.
• Soy Diesel Ethanol
• Asian Rust 2007

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-.25
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Marketing Considerations

• Offer Contracts an important Mktg. tool
• Look for substantial volatility, Feb.- Aug. 07
• Basis likely stronger in April-July 2007
• Creates potential profit from farm storage
• Role for harvest price revenue insurance
• New-Generation Grain Contracts some
• are useful, be careful of others (accumulator)

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Based on trades over life of November
futures History is no guarantee of future
performance
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Johnson, director, Cooperative Extension Service,
Iowa State University of Science and Technology,
Ames, Iowa.