October 8, 2010

 

USDA report shows larger supplies of US soy

 

The USDA's September 30 Grain Stocks report listed US soy grain stocks on September 1 at 151 bushels-up 9% from 138 million bushels a year ago.

 

Most harvest reports indicate larger-than-average soy yields across the nation, but soy stocks are not viewed as burdensome. Soy production is forecast at a record high 3.48 billion bushels, with an average yield of 44.7 bushels per acre. That number could be revised in the October 8 production report.

 

At the same time, China continues to purchase record levels of US soy.

 

Soy stocks of 35.4 million bushels on farms were up 1% from a year earlier. Off-farm stocks, at 116 million bushels, were up 12% from a year ago.

 

Stocks of the oilseed were larger on September 1, 2010 than one year earlier in Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and Wisconsin. Soy stocks were smaller in Illinois, Kansas and South Dakota.

 

The report forecasts a September 1, 2011 soy stocks number of 350 million bushels, considered large for US soy stocks.

 

In Iowa, soy harvest moved along quickly in late September. The Ames, Iowa region received rain during the third full week of September, but the weather turned sunny and soon the combine crews were back in the fields. Even with the rain delay, soy harvest was running about a week ahead of schedule.

 

On the CME Group exchange, soy traded on October 1 with November at US$11, January 2011 at US$11.08, March at US$11.17, May at US$11.18, July at US$11.21, and August at US$11.13 half per bushel.

 

Compared with prices on September 17, November was US$0.31 higher, January was US$0.35 higher, March was US$0.33 higher, May was US$0.30 higher, July was $US0.28 higher and August was US$0.30 higher.

 

The USDA's September 30 weekly export sales number was a whopping 1.737 million tonness (63.8 million bushels). China purchased about 75% of the soy.

 

As of September 23, cumulative US soy sales were 53% of the USDA annual forecast. That compares with 34% for the five-year average. Compared with a price of US$9.96 per bushel on September 17, the price was US$0.15 cents higher, and the basis had widened by US$0.17.

 

A lot of producers are storing corn and bringing in soy, according to Hart. Both crops are coming out of the field this year in good condition, so producers are willing to move the soy.

 

The USDA's October 10 Crop Production Report should give the corn and soy industry a better handle on the supply and demand of these commodities in the months ahead.