WASDE: soy supplies up, biodiesel use down

By Susanne Retka Schill | June 09, 2009
Posted July 13, 2009

USDA projected the U.S.soybean supplies higher and prices slightly down in its July 10 World Agricultural Supply and Demand Estimates report. Global oilseed production was projected to hit a record for 2009-'2010. USDA dropped its projections for soybean oil used for methyl esters in the U.S. to 2,000 million pounds compared to 2,200 million pounds projected in the previous month's report. That compares with USDA's estimates of 1,650 million pounds used for biodiesel in the 2008-'09 marketing year and 2,345 million pounds in 2007-'08.

U.S. oilseed ending stocks for 2009-'10 were projected at 8 million tons, up 1.1 million from last month. Higher soybean stocks accounted for most of the increase. Oilseed production was projected at 96.3 million tons, up 1.8 million tons, with increased soybean production accounting for most of the change. Soybean production was projected at 3.26 billion bushels, up 65 million due to increased harvested area. Harvested area estimated in the June 30 acreage report was 1.5 million acres above the June projection. The soybean yield was projected at 42.6 bushels per acre, unchanged from last month. Increased exports and crush partly offset increased supplies, leaving projected 2009-'10 ending stocks at 250 million bushels, up 40 million from last month.

Prices for soybeans and soybean products were all reduced this month. The U.S. season-average soybean price for 2009-'10 was projected at $8.30 to $10.30 per bushel, down 70 cents on both ends of the range. Soybean meal prices were projected at $255 to $315 per short ton, down 20 dollars on both ends. Soybean oil prices were projected at 31 to 35 cents per pound, down 2 cents on both ends of the range.

Global oilseed production for 2009-'10 was increased 2 million tons to a record 423.4 million tons. Foreign production was projected up 0.2 million tons to 327.1 million tons. Soybean production was projected at a record 243.7 million tons, up 2.1 million due mostly to higher production in the United States. Production was also raised for Canada based on higher harvested area reported by Statistics Canada. Increased sunflowerseed production for Ukraine and the United States was partly offset by a reduction for EU-27. Rapeseed production was increased for Canada as higher harvested area was only partly offset by reduced yields. Other changes include reduced rapeseed production for Ukraine and EU-27.

U.S. soybean exports for 2008-'09 were projected at 1.26 billion bushels, up 10 million from last month reflecting continued strong shipments and sales. In addition, higher projections for soybean meal exports and domestic soybean meal use resulted in a 5-million bushel increase in soybean crush to 1.655 billion bushels. Despite the increase, domestic soybean meal use for 2008-'09 was projected down 8 percent from 2007-'08 due to reduced meat production and increased supplies of alternative protein sources.
Increased soybean exports and crush were offset mainly by reduced residual use, leaving ending stocks for 2008-'09 unchanged at 110 million bushels.

For corn, the July 10 WASDE report projected 2009-'10 production at 12.3 billion bushels, up 355 million from last month as higher estimated area from the June 30 acreage report boosted production prospects. Corn supplies were projected at 14.1 million bushels, up 335 million bushels from 2008-'09. The 2009/10 marketing-year average farm price for corn was projected at $3.35 to $4.15 per bushel, down 55 cents on both ends of the range. Ending stocks for 2008-'09 were raised 170 million bushels as lower domestic use more than offsets an increase in expected exports.

Food, seed, and industrial use was lowered 120 million bushels with reductions projected for use in ethanol, sweeteners, and starch. The decline in corn prices boosted ethanol producer margins; however, reduced production of gasoline blends with ethanol in May and June, based on the most recent weekly data, indicate lower-than-expected ethanol corn use. Feed and residual use was lowered 100 million bushels as indicated by the June 1 stocks. Exports were raised 50 million bushels based on recent increases in shipments and the high level of outstanding sales for the 2008-'09 marketing year. The marketing-year average price was projected at $3.95 to $4.15 per bushel, down 15 cents on both ends of the range reflecting sharply lower summer price prospects.
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