March 14, 2016

US soybean stockpiles expected to increase in 2015-16


Federal forecasters in the US have raised the outlook for local soybean stockpiles this month while cutting back estimates for the world's grain and soybean reserves, The Wall Street Journal reported.

Soybean stockpiles worldwide will record 78.9 million tonnes for the 2015-16 season, compared to 80.4 million tonnes projected in February this year. In addition, lower estimates were also given for US soybeans crushed to make products like soymeal.

Soybean inventories in the States will amount to 460 million bushels at the end of the 2015-16 season on August 31, according to a report by the Agriculture Department. The volume is 10 million bushels bigger than a February forecast.

The latest developments is hardly any good news given low crop prices which have persisted and affected profitability for farmers, seed companies and tractor makers, Dan Cekander, president of market-research firm, DC Analysis, said.

Furthermore, the USDA in February expected that US farm incomes would decline to their lowest since 2002.

Although weather predictions have signaled the possibility of a warmer-than-usual summer, a potential drought would not significantly impact global supplies.

Corn futures were generally confined to lower prices following the USDA's forecast for local grain supplies. Inventories in August are expected at 1.837 billion bushels, unchanged from a February projection. On the other hand, corn reserves could be forecasted to 1.860 billion bushels, according to analysts.

On a global scale, corn stockpiles for 2015-16 would fall to 207 million tonnes, compared to 208.8 million tonnes projected in February, according to a USDA forecast.

For wheat, prices for the crop increased to a three-week high following a USDA report revealing smaller than expected US and global stockpiles.

Local wheat inventories on May 31 are pegged at 966 million bushels, the same volume as a February USDA estimate. Analysts expected a forecast of 975 million bushels.

Global wheat stockpiles for 2015-16 were estimated at 237.6 million tonnes, a lower volume than a February estimate of 238.9 million tonnes. The lower estimates were attributed to reduced production forecast for India and Australia, according to the USDA.

- Wall Street Journal

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