Soybean’s 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 October.
The global stock-to-use ratio for soybeans rose 1.6% to ~23.5% in October—compared to 22% in September. Unlike corn, the global soybean stock-to-use ratio is lower compared to the global stock-to-use ratio of 27% last year.
The global soybean stock-to-use ratio was also lower compared to the past three consecutive years—as you can see in the above chart. We’ll look at the inventory numbers for deeper insight.
Month-over-month, the soybean inventory in October 2016 rose to 77 million metric tons from 72 million metric tons in September 2016—a 7.1% increase, according to the U.S. Department of Agriculture. Compared to October 2015, the current inventory levels fell 9% from 85 million metric tons—a significant fall.
It’s important to track soybean’s stock-to-use ratio for seeds investors. 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.
In the next part of this series, we’ll discuss soybean prices.