US Soybean Ending Stocks Down Sharply

A slightly smaller production estimate and a big increase in expected 2020-21 exports has tightened the US soybean balance sheet considerably from last month.

According to a USDA supply-demand released Friday, soybean ending stocks for the current year will fall to just 290 million bu, down a major 170 million bu from the September estimate of 460 million and 44.5% below the previous year. The ending stocks number came in well below the average pre-report trade guess of 360 million bu, with futures trading between 16 and 25 cents higher on the news this afternoon.

This year’s US soybean crop is now estimated at 4.268 billion bu, down 45 million from the government’s September estimate on a 700,000-acre reduction in expected harvested area to 82.3 million acres. The average expected yield, at 51.9 bu/acre, was left unchanged from last month.

In addition to the smaller crop, the total 2020-21 soybean supply was further reduced by a smaller carryin from the 2019-20 marketing year, based on last month’s USDA grain stocks report. That report put national soybean stockpiles as of Sept. 1 – ending stocks for 2019-20 – at 523 million bu, a sharp 42% reduction from a year earlier and 52 million bu below the USDA’s September supply-demand estimate.

On the demand side, the USDA hiked its 2010-21 soybean export forecast by 75 million bu from last month to 2.2 billion, based on record early-season sales.

The US season-average soybean price for 2020-21 is forecast at $9.80/bu this month, up 55 cents from last month ‘reflecting smaller supplies and higher exports.’ The soybean meal price is forecast at $335/short ton, up $20, and the soybean oil price forecast is raised a ½ cent to 32.5 cents/lb.

The USDA held its 2020-21 Argentina and Brazil soybean production estimates unchanged from last month at 53.5 million and 133 million tonnes, respectively. On the other hand, global soybean ending stocks for this year were revised down to 88.7 million tonnes from 93.59 million in September and 93.75 million in 2019-20.

Source: DePutter Publishing Ltd.

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