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Soybean meal prices, basis Chicago futures, drifted during much of 1999 as they did in 1998, in both years pivoting around the $140.00 per ton area. Into mid-1999, a bearish bias persisted that carried to the $125.00 area; Prices then recovered, but the move lacked conviction and stalled near $160.00. The world supply and demand situation for soybean meal showed persistent growth through the 1990’s, and the pace is likely to quicken in the decade ahead due to the expansion in global poultry numbers. Soybean meal, a high protein feed used in formulating livestock and poultry rations, is obtained from the processing (crushing) of soybeans and is the world’s top protein meal with about 60 percent of total production. Cottonseed and rapeseed meal account for a combined total of about 20 percent. The U.S. is the largest producer of soybean meal followed by Brazil and Argentina. World soybean meal production in the mid-1990’s averaged about 88 million metric tonnes. In 1999/2000, a record 106 million metric tonnes were produced, of which the U.S. produced a record large 35.1 million tonnes. Brazil’s production proved larger than expected, reaching a record 16.3 million tonnes, however, Argentina’s production at 14 million tonnes in 1999/00 was marginally under the previous year’s 14.3 million. Part of the growth in meal production has been indirectly derived from the strong worldwide demand for vegetable oils, but the primary reason is that more countries have increasing livestock numbers and a burgeoning need for high protein feed; a fact that is underscored by the sharp expansion in the world’s soybean meal trade. Significantly, many of the recent gains in foreign trade have come from developing nations in both Latin America and Asia. World meal consumption in 1999/00 of a record large 105.9 million tonnes compares with 104.5 million in 1998/99. The U.S. is the largest single consumer using about 28 million tonnes, but the European Union and Asia run a close second each using 26 million tonnes in 1999/00. Asia’s use was particularly strong during the past decade reflecting the growth in the region’s poultry production. China’s 1999/00 consumption of 10.5 million tonnes compares with an annual average of less than 10 million prior to 1996/97, but the current year’s use lags the record 12.8 million tonnes in 1997/98. China’s imports have dropped, totaling 1.3 million tonnes in 1999/00 vs. 1.45 in 1998/99 and a record large 4.2 million in 1997/98. Still, earlier in the 1990’s, China was a net exporter of soybean meal. France, in 1999/00, was the largest single importer with 4 million tonnes, nearly 10 percent of the world total. Exports are dominated by Argentina and Brazil with a combined 24 million tonnes in 1999/00 out of a 40 million tonne total. World carryover at the end of the 1999/00 season is forecast at 3.9 million tonnes, marginally lower than a year earlier. As usual, Argentina and Brazil account for at least a third of the carryover. U.S. soybean meal production (October-September) in 1999/00 of a record 38.7 million (short) tons compares with 37.9 million in 1998/99. Total 1999/00 supplies of 39 million tons compares with 38.2 million in 1998/99, including a small carry-in at the start of each crop year. Total supplies in the early 1990’s averaged near 30 million tons. Domestic usage climbed steadily in the 1990’s and is expected to total a record high 31 million tons in 1999/00 vs. 30.6 million in 1998/99, due primarily to increases in poultry production. It now appears that poultry demand controls the U.S. soybean crush, not demand for soybean oil. Cattle accounts for a minor amount of soybean meal usage, hogs slightly more. U.S. soybean meal exports in 1999/00 were forecast at 7.8 million metric tonnes vs. 7.3 million in 1998/99 and a record large 9.3 million in 1997/98; the decline from the latter reflecting smaller demand from China and increased competition from Brazil and Argentina. U.S. soybean meal prices, basis 48 percent protein, Decatur, Illinois, were expected to average between $145-$170.00 per short ton in 1999/00 vs. $138.50 in 1998/99. Futures Markets Soybean meal futures and options are traded on the Chicago Board of Trade. A smaller futures contract is traded on the Mid-America Commodity Exchange.

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Excerpted from the CRB Commodity Yearbook.