New-Crop Soy Ending Stocks Down on Smaller Production

The USDA reduced its new-crop soybean ending stocks forecast this month, due to a smaller U.S. production forecast.

Starting with old-crop, in updated supply-demand estimates released Thursday, the USDA trimmed its 2018-19 soybean ending stocks estimate by 20 million bu to 1.05 billion bu. However, that was overshadowed by a much larger 250-million bu decrease in new-crop ending stocks to 795 million – slightly below the average pre-report trade estimate of 816 million. Soybean futures were trading 2-3 cents higher after the report’s release this afternoon.

Based on the smaller soybean seeded area noted in its June 28 acreage report (80.0 million acres versus March intentions of 84.6 million), the USDA slashed its forecast of 2019 U.S. soybean production by 305 million bu from last month to 3.85 billion.

At 48.5 bu/acre, the average expected 2019 soybean yield was down 1.0 bu from last month. This forecast should be viewed as highly tentative due to the lateness of the crop, indicated the USDA.

The USDA added that, because of the problems getting crops planted this spring in many parts of the U.S., acreage was being resurveyed in July. The results are expected to be incorporated into the production report due on August 12.

On the demand side, the USDA reduced its 2019-20 soybean export forecast by 75 million bu to 1.88 billion to reflect the import tariff that China officially put in place against American soybeans last July and has stubbornly refused to remove.

The U.S. season-average soybean price for 2019-20 is forecast at $8.40/bu this month, up 15 cents from June. Soybean meal prices are forecast at $300/short ton, up $5, while the new-crop soybean oil price forecast of 29.5 cents/lb is the same as last month.

Global soybean ending stocks for 2019-20 are seen at 104.5 million tonnes this month, down from 112.7 million in June.

Old-crop world ending stocks are pegged at 113.0 million tonnes, up slightly from 112.8 million last month. ​​​​​​​

Source: DePutter Publishing Ltd.

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