Higher Yield Boosts US Soy Production, Ending Stocks

A nearly 1 bu/acre increase in this year’s average yield estimate has pushed 2021-22 US soybean production and ending stocks up from last month and above expectations.

Tuesday’s supply-demand update from the USDA raised the 2021 US yield estimate by 0.9 bu/acre from last month to 51.5 bu/acre – up from 51 bu a year earlier. With planted and harvested area unchanged from September at 87.2 million and 86.4 million acres, respectively, the increase in the average yield raised production by 74 million bu to 4.448 billion, up 5% from last year and a new record high.

Based on last month’s USDA grain stocks report, 2021-22 beginning stocks are also higher this month, revised up to 256 million bu from 175 million in September, helping to raise the total 2021-22 soybean supply to 4.719 billion, versus 4.574 million bu in September and 4.761 billion the previous year.

The USDA did offset some of this month’s larger supply by increasing its 2021-22 crush estimate, up 10 million bu to 2.19 billion bu, although exports were left steady at 2.09 billion.

The bottom line was a hefty 135-million bu increase in the 2021-22 ending stocks forecast from September to 320 million, up 25% from a year earlier.

Going into today’s report, traders and analysts were expecting just a 35.6-million bu increase in the production estimate, with ending stocks only climbing about 113 million bu. Soybean futures were trading about 25 cents lower following the report’s noon hour release.

The largest production changes this month were for Iowa, Minnesota, and Nebraska, which all saw 2 bu increases from September to 61, 49 and 61 bu/acre, respectively.

The US season-average soybean price for 2021-22 is forecast at $12.35/bu this month, down 55 cents from September on larger supplies. The soybean meal price is forecast at $325/short ton, down $35, while the soybean oil price forecast is unchanged at 65 cents/lb.

Global soybean supply and demand forecasts for 2021-22 include higher beginning stocks, lower crush, and higher ending stocks. Higher beginning stocks reflect increases for the US, Argentina, and China. Argentina’s beginning stocks are raised on a downward revision to the 2020-21 crush. Expected 2021-22 soy production for Argentina is down 1 million tonnes from last month to 51 million due to a lower projected harvested area, while Brazil is steady at 144 million.

Global soybean ending stocks for 2021-22 are increased 5.7 million tonnes this month to 104.6 million, up from 99.16 million a year earlier.

Source: DePutter Publishing Ltd.

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