WASDE: small increases in new crop supply, demand

By Susanne Retka Schill | May 11, 2009
Posted May 12, 2009, at 8:19 a.m. CDT

The soybean market may be settling down, if the USDA's first projections for the 2009-'10 marketing year prove accurate. The USDA made its initial assessments for the next marketing season in its May 12 World Agricultural Supply and Demand Estimate report with the caveat that "because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative." The projections reflect economic analysis, normal weather, trends and judgment.

In the USDA forecast, the U.S. season average soybean oil prices were projected at 32.5 to 36.5 cents per pound compared with 32.5 cents for 2008-'09. The season-average soybean price for 2009-'10 was projected at $8.45 to $10.45 per bushel compared with $9.85 in 2008-'09. Soybean meal prices were forecast at $260 to $320, compared with $305 per ton for 2008-'09.

Soybean crush for 2009-'10 was projected to increase 2 percent to 1.67 billion bushels reflecting a small increase in domestic meal use and higher exports. Domestic soybean oil consumption was projected to increase 1 percent as biodiesel expansion is partly offset by a small decline in food use. Soybean oil used for biodiesel production was projected at 2.2 billion pounds, up 300 million from the revised 2008-'09 estimate of 1.9 billion.

U.S. oilseed production for 2009-'10 was projected at 94.5 million tons, up 6 percent from 2008-'09 with soybean production accounting for most of the increase. Soybean production was projected at 3.2 billion bushels, up 236 million from 2008-'09 reflecting a small increase in harvested area and a trend yield of 42.6 bushels per acre. Soybean supplies were projected at 3.3 billion bushels, up 5 percent from 2008-'09 as smaller beginning stocks partly offset increased production. Cottonseed production was also projected higher, while peanuts, sunflower seed and canola production were projected down.

Reduced South American supplies, due to drought in Argentina, Paraguay, and southern Brazil, were projected to push U.S. soybean exports to a record 1.26 billion bushels. Ending stocks were projected at 230 million bushels, resulting in a relatively low stocks-to-use ratio at 7 percent.

Global oilseed production for 2009-'10 was projected at a record 422.1 million tons, up 25.9 million from 2008-'09. Foreign oilseed production was projected at 327.6 million tons, up 20.4 million. Global soybean production was projected to increase 14 percent to 241.7 million tons. The Argentina crop was projected at 51 million tons, up 17 million from the revised estimate for the 2008-'09 crop based on increased harvested area and a return to trend yields. The Brazil crop was projected at 60 million tons, up 3 million from 2008-'09 based on a 3 percent increase in harvested area. China soybean production was projected at 15.6 million tons, down 0.4 million from 2008-'09 due to reduced area. Global production of high-oil content seeds was projected to decline 2 percent from 2008-'09 as lower projected yields more than offset higher area for sunflower seed and rapeseed. Lower rape seed production for Canada and Ukraine more than offsets increases for China, EU-27, India, and Australia. Lower sunflower seed production for Russia, Ukraine, and EU-27 more than offsets an increase for Argentina. Despite higher global oilseed production, 2009-'10 supplies are up just 4 percent reflecting lower beginning stocks.

Global protein meal consumption was projected to increase 3 percent in 2009-'10. Protein meal consumption was projected to increase 4 percent in China, accounting for 32 percent of global protein consumption gains. Global soybean trade was projected at 75.3 million tons, up 2.1 million from 2008-'09. China imports were projected to account for just over half of world trade at 38.1 million tons.

Global vegetable oil consumption was projected to increase 3.8 percent in 2009-'10 led by increases for China, India, and EU-27. Global vegetable oil stocks are projected to decline 6 percent from 2008-'09.
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