December 13, 2004

USDA Raises Forecast For China's Soybean Production

The U.S. Department of Agriculture on Friday raised its forecast for 2004-05 soybean production in China to a record 18 million metric tons, up from last month's forecast of 17.5 million tons.

The USDA, in its monthly supply and demand report, attributed the increase to "higher projected yields."

Despite the expected production increase, the USDA did not lower its prediction for Chinese soybean imports, which remains stable at 22 million tons.

Both Chinese production and imports are substantially higher than last year. According to USDA data, China produced 15.4 million tons of soybeans for 2003-04 and imported 16.93 million tons.

The increase seen for Chinese soybean production is one factor in USDA's higher global oilseed production forecast in the December report. The USDA is now forecasting 2004-05 world oilseed production at 390.5 million tons, about 2 million tons more than last month. Other factors include stronger rapeseed production in Canada and stronger cottonseed production in India and Pakistan.

A month ago, the USDA raised its forecast for U.S. soybean production to a record level, but left that estimate unchanged at 3.15 billion bushels in December. Traders and analysts were expecting the USDA to lower its November U.S. soybean export forecast of 1.01 billion bushels, but USDA left that unchanged as well.