September 13, 2007

USDA lowers US soybean production and export forecasts

The US Department of Agriculture (USDA) on Wednesday (September 12) lowered its forecasts for US soybean production and exports for the 2007/08 marketing year.

Citing lower-than-expected yields, the USDA said in its September supply and demand report that it was decreasing its soybean production forecast to 2.619 billion bushels, down from the August prediction for 2.625 billion.

The USDA said it was "lower yield prospects, especially in the South," that accounted for the production forecast decrease.

In its Crop Production report, also released Wednesday, the USDA said, "Compared with last month, yields are forecast lower across the central Corn Belt, the Tennessee Valley, and the Southeast. Hot, dry conditions contributed to most of the decline, especially in Kentucky and Tennessee ..."

With weaker production and strong domestic demand, soybean exports will be scaled back, the USDA said in the supply and demand report.

The newly reduced forecast for US soybean exports is 975 million bushels, a 45-million-bushel drop from the August forecast of 1.02 billion.

The USDA lowered its forecast for soybean ending stocks to 215 million bushels - a 5-million-bushel drop from last month - and raised expectations for average farm prices by 10 cents on both ends of the predicted range. The new average farm price prediction is US$7.35 to US$8.35 per bushel.