Based on my end of the month calculation using 2020-2021 marketing year average for the cmdty National Soybean Price Indexes, US stocks-to-use at the end of May continued to tighten. The NSPI showed a daily average of $12.46 for the 2020-2021 marketing, correlating to a 0.3% stocks-to-use calculation based on a study going back through 2013-2014. The end of April saw the average cash price calculated at $12.10 correlating to a stocks-to-use calculation of 0.4%. The benchmark for tight US soybean supply and demand remains 2013-2014 with an average cash price of $13.18 implying ending stocks-to-use of 0.1%. However, there are a couple issue that need to be addressed:
- Again, my system uses the marketing year daily average, calculated at the end of May at $12.46. However, the NSPI was calculated Friday, May 28 at $15.16 implying the US soybean available stocks-to-use situation is far tighter than the average is indicating. The last time a cash index was this high was during July 2013, with a high of $15.64 posted.
- Something about this chart hasn’t, and still doesn’t, looked right to me. We can see the effects of switching from one marketing year to the next, indicated by the fall off the cliff that occurred between August and September 2020. Why did this occur? Because the 2019-2020 marketing year saw the NSPI average $8.35, correlating to an ending stocks-to-use of 14.5%, before the same index averaged $9.37 during September 2020 and has done nothing but climb from there.
The US has seen a slowdown in demand. Some of this is seasonal, but the lack of available supplies is also an issue heading into Q4.