December 12, 2007

USDA raises US 2007-08 soy export forecast and farm prices

The US Department of Agriculture on Tuesday (December 11, 2007) raised its forecast for US soy exports in the 2007-08 marketing year to 995 million bushels, a 20-million-bushel (2 percent) increase from its November forecast.

Chinese demand is the primary factor behind the increase, the USDA said in its monthly supply and demand report.

The USDA revised its forecast for overall Chinese soy imports up to 34 million  tonnes, a 500,000-tonne increase from USDA's November prediction.

The USDA also lowered its 2007-08 forecast for US ending stocks and significantly raised its estimate for the average price farmers get for their soys.

The 2007-08 carryout for soys is now expected to drop to just 185 million bushels, a decrease from the 210 million bushels the USDA predicted a month ago.

Farm prices, the USDA said, will be 75 cents per bushel higher on each end of the average range. The new forecast is for US$9.25 to US$10.25. That's up from the November forecast of US$8.50 to US$9.50.

The increase in farm prices, USDA said, is due to "sharply higher cash and soy future prices."