Global Soybean Ending Stocks Up Sharply

Global and U.S. soybean ending stocks are continuing to trend higher, with the world estimate seeing a particularly sharp increase this month.

April 11, 2017 – In updated supply-demand estimates released Tuesday, the USDA raised its 2016-17 soybean ending stocks estimates from last month for both the U.S. and the world. Meanwhile, its average U.S. soybean price forecast ticked lower.

Globally, the USDA increased projected 2016-17 oilseed production 5.4 million tonnes from last month to 563.4 million, mainly on a combined 5-million tonne increase in soybean output for Brazil, Paraguay, Uruguay, and Argentina. The Brazilian 2016-17 soybean crop is now seen at 111 million tonnes, compared to 108 million in March and 96.5 million last year, while Argentina’s crop was increased 500,000 tonnes from March to 56 million – still below last year’s 56.8-million tonne crop.

Thanks to those larger crops, global soybean ending stocks are projected at a record 87.4 million tonnes this month, up from 82.82 million in March and 10.3 million above a year earlier.

At home, the USDA bumped expected soybean seed use higher, up 9 million bu to 104 million, to account for the record-large U.S. soybean planted area expected this spring. However, that increase in use was more than offset by a reduction in projected residual disappearance, which fell all the way to just 14 million bu from 33 million in March and 25 million a year earlier.

The end result was a 10-million bu increase in estimated 2016-17 U.S. soybean ending stocks to 445 million, versus just 197 million the previous year.

The U.S. season average soybean price is lowered 5 cents at the midpoint this month to US$9.55/bu, based on marketings to date and lower expected prices for the second half of the marketing year. Soybean oil prices are projected at 31 to 33 cents/lb, down 1.5 cents at the midpoint, while soybean meal prices are pegged at $310 to $330/short ton, down $5 at the midpoint.

Soybean futures were trading about 7 cents lower early this afternoon, after the report’s release.

Source: DePutter Publishing Ltd.