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Why the Soybean Stock-to-Use Ratio Rose in September

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Soybean stock-to-use ratio

Earlier in this series, we discussed the global stock-to-use ratio for corn and how it impacted global corn prices. In this part, we’ll discuss the soybean stock-to-use ratio and how it impacted soybean prices in September.

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September levels

The global stock-to-use ratio for soybeans rose by 36 basis points to ~22.0% in September 2016 compared with 21.6% in August 2016. Unlike corn, the global soybean stock-to-use ratio is lower compared to the previous year’s global stock-to-use ratio of 28%.

The soybean global stock-to-use ratio was also lower compared with the past three consecutive years. Let’s look at the inventory numbers for deeper insight.

September inventory

Month-over-month, the soybean inventory in September 2016 rose to 72 million metric tons from 71 million metric tons in August 2016, according to the USDA. But when compared with September 2015, current inventory levels are down 15% from 85 million metric tons—a significant drop.

About 15% of Monsanto’s (MON) revenue in 2015 came from soybean seeds and traits, and ~39.7% of the revenue came from corn seeds and traits. In 2015, about 12% of Syngenta’s (SYT) revenue came from its corn and soybean seeds business.

Investors in these companies (MOO), as well as fertilizer companies such as PotashCorp (POT) and CF Industries (CF), must track these two commodities and their prices.

In the next part of this series, we’ll discuss soybean prices.

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