September 29, 2004

Sept 1 US Soybean Stocks Expected At 119 Million Bushels

Total soybean inventories in the US as of Sept. 1 are expected to fall to about 119 million bushels in Thursday's quarterly stocks report. But the figure will be higher than previously thought earlier in the year due to the underestimate of the size of the 2003-04 US soybean crop, industry analysts said in a survey.

The US Department of Agriculture's quarterly stocks report is scheduled to be released Thursday at 0730 CT (1230 GMT).

In the survey, estimates ranged from 105 million to 145 million bushels. While the average survey estimate of 119 million bushels is still considered very low, it would be an increase from the September crop production report's forecast on ending stocks of 105 million bushels. The possible rise in the calculation of end-of-year inventories is due to the 2003-04 US soybean crop being underestimated. Analysts figure last year's crop could have been underestimated by anywhere from 20 million to 30 million bushels. According to the USDA's calculation, last year's crop was 2.418 billion bushels.

Anne Frick, oilseeds analyst for Prudential Securities in New York, said the relative tightness of the old-crop stocks could be seen in the basis levels throughout the country, which were not as high as they could have been.

"The basis levels didn't indicate that stocks were as tight as that. If we were at 105 (million bushels for ending stocks), they would have been a lot stronger," Frick said.

The two previous stock reports also indicated that the crop size last year was underestimated, said Jerry Gidel, analyst at North America Risk Management in Chicago. In the March stocks report, total stocks were tallied at 906 million bushels, and in June, total stocks were figured at 410 million bushels. Both figures were above industry expectations.

In addition, the large southern soybean crop, which experienced ideal growing conditions and saw what are thought to be record-breaking yields, added to inventories.

"We had a higher-than-normal southern crop. There were 15 to 20 million bushels more," Gidel said, adding that Mississippi, the largest soybean-producer in the Mississippi Delta region in the southern US, was 40% harvested before Sept. 1, which is the end of the soybean marketing year.