Market News & Headlines >> U.S. Soybean Supplies Extremely Tight
The U.S. soybean supply/demand situation is looking extremely tight after USDA on Tuesday cut its estimate of 2020/21 U.S. ending stocks by another 35 million bushels due to lower-than-expected 2020 production and stronger-than-expected usage.
The further cut to 2020 production and the projected U.S. soybean carryout combined with cuts to projected South American production sent soybean futures soaring to further huge gains on Tuesday.
In its annual Crop Summary report, USDA lowered 2020 U.S. soybean production by 35 million bushels to 4.135 billion bushels, dropping the U.S. average yield to 50.2 bushels per acre from the previous estimate of 50.7 bushels, more than offsetting a marginal increase of 29,000 in harvested acres.
In its monthly supply/demand report, USDA pegged this year’s U.S. soybean carryout at just 140 million bushels, down from its previous estimate of 175 million and last year’s 525 million. The carryout estimate, however, was in line with pre-report expectations, which averaged 139 million bushels in a range from 105-166 million, according to a Reuters News Service survey. However, USDA's projected 2020/21 U.S. soybean ending stocks/usage ratio is just 3.1%, the tightest since 2013/14.
USDA raised projected 2020/21 U.S. soybean exports by 30 million bushels to 2.230 billion bushels, based on the strong pace of export sales and export shipments to date. USDA also raised the projected 2020/21 U.S. soybean crush by a modest 5 million bushels due to the strong September-November crush pace. The increases to exports and the crush were offset, though, by a 20-million-bushel increase in expected U.S. imports, a cut to residual usage and a small upward revision in the old-crop carry-in.
USDA’s Quarterly Grain Stocks report pegged Dec. 1 U.S. soybean stocks at 2.933 billion bushels, closely in line with pre-report expectations that averaged 2.920 billion and down from the year-earlier stocks of 3.252 billion bushels.