WASDE Oilseeds: U.S. Soybean Production Down 56Mln Bushels

U.S. oilseed production for 2018/19 is estimated at 134.0 million tons, down 1.5 million from the previous report. Smaller soybean, canola, peanut, and cottonseed crops are partly offset by an increase for sunflowerseed. Soybean production is estimated at 4,544 million bushels, down 56 million. Harvested area is estimated at 88.1 million acres, down fractionally from the previous report.

Yield is estimated at 51.6 bushels per acre, down 0.5 bushels, led by reductions for North Dakota, South Dakota, and Nebraska. The soybean crush forecast is raised 10 million bushels to 2,090 million. Soybean meal production is unchanged as the higher crush is offset by a lower extraction rate.

Lower supplies and increased crush are partly offset with a 25-million-bushel reduction in exports. Ending stocks are projected at 910 million bushels, down 45 million from the previous forecast.

The 2018/19 U.S. season-average farm price forecast for soybeans is projected at $8.10 to $9.10 per bushel, unchanged at the midpoint. The soybean meal price is forecast at $295 to $335 per short ton, up $5.00 at the midpoint. The soybean oil price forecast of 28.5 to 31.5 cents per pound is unchanged at the midpoint.

The 2018/19 global soybean outlook includes lower production, exports, crush, and stocks. Global soybean production is lowered 8.2 million tons to 361.0 million with lower crops for Brazil, Argentina, Paraguay, Uruguay, and South Africa. Production for Brazil is lowered 5 million tons to 117 million due to dryness in parts of the South and Center-West regions.

Production for Argentina is lowered 0.5 million tons to 55 million due to a reduction in harvested area that is partly offset by increased yields. Global soybean exports are reduced 1.7 million tons to 154.4 million. Lower exports for Brazil, Uruguay, and Paraguay are partly offset by higher exports for Argentina. Global imports are also reduced mainly on a 2-million-ton reduction for China due to lower crush demand.

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Global 2018/19 soybean marketing-year ending stocks are lowered 8.6 million tons this month to 106.7 million, which is an 8.6-million-ton increase over the 2017/18 estimate. In addition to crop related changes, this month’s lower global ending stocks forecast reflects historical balance sheet revisions for Argentina (back to 2009/10) and Brazil (back to 1999/00).

The revisions were motivated by supply and demand conditions indicating that beginning stock levels for the 2017/18 local year should be higher in Brazil and lower in Argentina than previously estimated. Additionally, these revisions are more in line with historical stocks revisions made in late 2018 by Argentina’s Ministry of Agriculture and Brazil’s Association of Vegetable Oil Industries (ABIOVE).

With Argentina’s 2018 crop falling 30 percent below initial projections due to the drought, soybean stocks are assumed to be lower than prior estimates. The post-drought stocks-to-use ratio had been projected at 38 percent for the 2017/18 local year (April 2018-March 2019). The USDA’s estimates are guided by Argentina’s official crush, trade, and production data. Projected stocks are reduced with upward revisions to residuals, which take into account supplies needed for reported use, statistical errors, and possible unreported demand during the past decade.

While stocks are reduced for Argentina, Brazil’s stocks are revised higher starting in 1999/00. Record exports during October 2018-January 2019, the end of Brazil’s 2017/18 local year (February 2018-January 2019), motivated the revisions. Record late-season exports made it apparent that, in addition to a record crop, beginning stocks were higher than previously estimated. Brazil’s ending stocks were revised over several years to increase supplies in order to meet reported use through 2017/18.

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