February 10, 2006

USDA raises 2005/06 US soybean ending stocks forecast

The US Department of Agriculture Thursday boosted its forecast for 2005/06 soybean ending stocks to a record-level of 555 million bushels because of weaker-than-expected exports.

The previous soybean ending stocks record was 536 million bushels, recorded in 1985/86. If the new USDA forecast comes true, 2005/06 ending stocks would be more than double the 2004/05 carryout of 256 million bushels.

The USDA, in its monthly supply and demand report, raised its 2005/06 carryout prediction by 50 million bushels up from its January forecast of 505 million bushels. At the same time, the USDA lowered its export forecast to 910 million bushels, a 40-million-bushel drop from the 950 million that the USDA said it was expecting a month ago.

"Record Brazilian soybean exports for October through January have reduced demand for US soybeans in (the European Union) and China," the USDA said Thursday in the report, "and large new-crop supplies in South America are expected to further pressure US exports in the second half of the marketing year".

Analysts who had been eyeing the weaker-than-expected soybean exports in recent months said earlier this week they were generally expecting the USDA to raise its carryout forecast. Analysts said they were also expecting the USDA to cut its crush forecast.

The USDA, in the February report, lowered its 2005/06 soybean crush forecast to 1.72 billion bushels, 10 million bushels less than the 1.73 billion bushels predicted a month ago.