November 15, 2004

USDA Raises 2004-05 US Soy Crop Forecast

The U.S. Department of Agriculture on Friday raised its forecast yet again for U.S. 2004-05 soybean production to a new record of 3.15 billion bushels, just above market expectations, and raised its prediction for ending stocks.
 
The new production forecast, released in USDA's November monthly supply and demand report, tops the October forecast of 3.107 billion bushels, which would have also proved to be record production.
 
The USDA, however, said in the supply and demand report it also expects soybean ending stocks to be higher than previously expected and cut its forecast for exports.
 
Soybean ending stocks for 2004-05 are now expected by USDA to total 460 million bushels, the highest level since 1985-86, according to the report. The USDA had set its forecast at 405 million bushels last month.
 
"Projected soybean exports are reduced 15 million bushels, mainly reflecting lower import demand in China," the USDA said in the supply and demand report. "Higher freight rates are expected to moderate stock accumulation by crushers in China."
 
The USDA lowered the U.S. export forecast to 1.01 billion bushels in the November report.
 
The forecast for total world soybean imports was lowered in the November report by 800,000 metric tons, most of which was attributed to weaker imports by China. The USDA lowered its prediction for China's 2004-05 soybean imports to 22 million tons, 500,000 tons less than was forecast in October.