USDA keeps domestic soy stocks view steady

Chicago | Reuters — The U.S. Agriculture Department on Tuesday left its estimate for domestic soybean supplies unchanged but boosted its outlook for world stocks amid rising expectations for the South American crop.

U.S. soybean ending stocks for the 2018-19 marketing year were pegged at 955 million bushels, the government said in its monthly supply and demand report. USDA had boosted its soybean ending stocks view in its five previous monthly reports.

Analysts had expected the government to show ending stocks of 945 million bushels, according to the average of estimates in a Reuters poll.

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If realized, soybean stocks would hit a record high as U.S. President Donald Trump’s trade war with China has sharply cut into demand for U.S. supplies from the world’s biggest buyer of the oilseed. USDA left its soybean export outlook unchanged at 1.9 billion bushels this month.

“Every month they don’t lower soybean exports is a good month for beans,” said Jim Gerlach, president of A/C Trading. “When you’re running this far behind the pace that you need and you don’t lower it, that’s telling you that they see exports coming from somewhere some time.”

USDA also left its forecast for Chinese soybean imports unchanged at 90 million tonnes.

But it raised its outlook for world soybean supplies to 115.33 million tonnes from 112.08 million tonnes, topping analysts’ expectations for 112.79 million tonnes. The government boosted its forecast for Brazil’s soybean crop by 1.5 million tonnes to 122 million tonnes.

“That’s a big number (global soybean ending stocks) and likely to go higher if we don’t see a sale to China,” said Mike Zuzolo of Global Commodity Analytics. “The market is in a bit of a holding pattern, waiting for a sale.”

Soybean futures, which had been trading close to unchanged before the report was released, firmed as investors digested the data. But the market remained cautious as traders waited for clear signs of a pick-up in Chinese purchases.

U.S. corn stocks for 2018-19 were pegged at 1.781 billion bushels, up from the November forecast for 1.736 billion bushels. The government lowered its estimate of corn used for ethanol production by 50 million bushels.

USDA forecast wheat ending stocks of 974 million bushels, up from its November outlook for 949 million bushels due to a cut of 25 million bushels in its U.S. export forecast.

Wheat futures sank to session lows before finding technical support.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Tom Polansek and Michael Hirtzer.

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