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U.S. organic soybean supply forecast to dip

The U.S. supply of organic soybeans is expected to decline this year due to slowing imports, according to The Jacobsen, a provider of organic non-GMO grain prices globally.

Meanwhile, The Jacobsen projected a rise in organic corn imports during the current harvest season, which should continue to weigh on organic corn prices. The Jacobsen said it sees the divergence between organic soybean prices and organic corn prices continuing for the foreseeable future.

U.S. demand is reliant on organic grain imports. Approximately 20% of the organic corn that is used for feed in the United States is imported, while approximately 70% of the organic soybeans and organic soybean meal that is consumed in the United States is imported, with most of the imports coming from India.

Imports of organic whole corn and organic cracked corn are expected to rise during the balance of the 2019-20 season by approximately 8%, climbing to 16.2 million bushels, according to the report.

With demand expected to remain unchanged year over year, the stock-to-use ratio is expected to climb, generating headwinds for organic corn prices. For the 2019-20 season, The Jacobsen sees organic corn prices that are picked up at the farm in the Midwest averaging $8.30, down from $8.60 seen during the 2018-19 harvest season.

During the 2018-19 season, imports of organic soybeans dropped by nearly 100,000 tonnes and were replaced by a similar volume of organic soybean meal, the report said.

The Jacobsen said organic soybean prices have hit multi-year highs and are likely to continue to remain buoyed as imports of organic soybeans to the United States continue to slow. The Jacobsen said it expects organic soybean imports from India, the largest exporter of organic soybeans to the United States, to decline by 40% to 50% during the 2019-20 season due to a poor harvest.

The Jacobsen expects the stock-to-use ratio of organic soybean meal to decline substantially during the 2019-20 season. In addition, the U.S. harvest saw a decline in organic soybean production by approximately 22%. This puts the average price of organic soybeans for the harvest season up to $21 per bushel, with prices likely topping out for organic feed grade soybeans at $23 per bushel, it said.