WASDE Oilseeds: Reduced Soybean Exports, Higher Domestic Stocks

This month’s U.S. soybean supply and use projections for 2018/19 include lower supplies, lower exports, higher crush, and higher ending stocks. Beginning stocks are reduced on increased exports and crush for 2017/18. Soybean production for 2018/19 is projected at 4.310 billion bushels, up 30 million on increased harvested area.

Harvested area, forecast at 88.9 million acres in the Acreage report, is up 0.7 million from last month. The soybean yield forecast is unchanged at 48.5 bushels per acre.

Soybean crush for 2018/19 is raised 45 million bushels to 2.045 billion reflecting an increase in projected soybean meal domestic disappearance and exports. Domestic soybean meal disappearance is raised on lower soybean meal prices and increased livestock production.

Soybean and product trade changes reflect the impact of China’s recently imposed soybean import duties in addition to other global oilseed supply and demand changes this month. U.S. soybean meal exports are raised to offset reduced meal exports from South America where higher soybean exports displace crush. Soybean exports are reduced 250 million bushels to 2.040 billion reflecting the impact of China’s import duties.

Despite losing market share in China, soybean exports are supported in other markets as lower U.S. prices increase demand and market share. Soybean ending stocks for 2018/19 are projected at 580 million bushels, up 195 million from last month.

The U.S. season-average soybean price is forecast at $8.00 to $10.50 per bushel, down $0.75 at the midpoint. Soybean meal prices are forecast at $315 to $355 per short ton, down $15.00 at the midpoint. The soybean oil price forecast at 28 to 32 cents per pound, down 1.5 cents at the midpoint.

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The 2018/19 global soybean supply and demand forecasts include higher production and lower trade and crush compared to last month. The tariff that China recently imposed on U.S. soybeans is expected to cause higher prices for soybeans in China and slower protein meal consumption growth. Lower demand and a year-over-year drawdown in stocks for China are forecast to result in reduced crush and an 8-million-ton decline for imports to 95 million. Parallel to this change is a 6.8-million-ton decline for U.S. exports that is partly offset by a 2.1-million-ton increase for Brazil.

Planted area for Brazil for 2018/19 is expected to expand with higher prices resulting from increased trade with China, leading to a 2.5-million-ton increase in production to 120.5 million. With lower soybean crush and reduced soybean oil production, China is expected to increase imports of other vegetable oils, including soybean, palm, and rapeseed.

Total global 2018/19 oilseed production is down 1.4 million tons to 592.6 million with a 4.3-million-ton increase for soybean production offset by lower rapeseed and sunflower. Rapeseed production is reduced 2.6 million tons with lower production for the EU, Australia, Ukraine, and Russia. In the EU, rapeseed production is lowered for Germany and the UK on persistent dryness while production is lowered for France on pest pressure. Sunflowerseed production is down 2.9 million tons mainly for Russia and Ukraine on lower yields from dry conditions.

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