WASDE: Record soy oil stocks projected

By Susanne Retka Schill | August 19, 2009
Posted September 11, 2009

USDA boosted its projections for the U.S. corn and soybean crop in its monthly World Agricultural Supply and Demand Estimates report issued Sept. 11. The corn crop was projected to hit a record 161.9 bushel per acre yield while soybean yields were projected at 42.3 bushels per acre. Total U.S. soybean production was forecast at 3.25 billion bushels, up 46 million based on those higher projected yields on the projected 76.8 million acres to be harvested. Ending stocks were project at 220 million bushels, up 10 million, in spite of a projected increase in exports expected due to a short soybean crop in India. The soybean crush projections for the U.S. were raised 20 million bushels due to those higher projected soybean meal exports for the 2009-'10 marketing year.

USDA projected soybean oil stocks at a record high of 3.1 billion pounds at the end of the current, 2008-'09 marketing season, also noting increased use of soybean oil for biodiesel of 100 million pounds and reduced soybean meal exports. Soybean oil use for biodiesel was raised to 2.1 billion pounds compared to 1.85 billion pounds in the current marketing year and 3.24 billion pounds in 2007-'08. Soybean exports for 2008-'09 were projected at a record 1.28 billion bushels, up 15 million from last month reflecting exceptionally strong shipments in the final weeks of the marketing year. The increase was offset with lower residual, leaving ending stocks unchanged at 110 million bushels.

The U.S. season-average soybean price range for 2009-'10 was projected at $8.10 to $10.10 per bushel, down 30 cents on both ends of the range. The soybean meal price was projected at $250 to $310 per short ton, down $10 on both ends. The soybean oil price range was unchanged at 32 to 36 cents per pound.

Global soybean production was projected at a record 243.9 million tons, up 1.9 million as increased production forecasts for the United States and Brazil were partly offset by reductions for China, India, and Canada. Brazil soybean production was projected at 62 million tons, up 2 million from last month due to an increased area projection reflecting favorable soybean prices relative to corn. China soybean production was reduced 0.4 million tons to 15 million based on lower yields resulting from untimely dry conditions in northeastern growing areas. India soybean production was reduced 1 million tons to 9 million due to reduced harvested area and lower yields. A late start to planting resulted in lower-than-expected area sown. Lower yields are projected due to a period of dryness in late July and early August.

Global rapeseed production was almost unchanged as lower production for Canada is offset by higher production for EU-27. The EU-27 crop benefitted from record yields in France.

Global oilseed trade for 2009-'10 was raised 0.7 million tons to 91.8 million. Increased soybean imports for China account for most of the change. Global oilseed stocks were projected higher mainly due to higher soybean stocks in China and the United States, which were only partly offset by lower stocks in Argentina and India. China soybean imports for 2008-'09 were raised to a record 39.8 million tons.

A record projected corn yield of 161.9 bushels per acre has the USDA boosting its U.S. corn production figure to 13 billion bushels for the maturing crop. The resulting increase of 193 million bushels from the previous month's estimates were projected to get used up by increased exports and domestic use. In particular, higher than expected corn use for ethanol for the current marketing year had the USDA lowering its beginning stocks by 25 million bushels based on record July and August production of gasoline blends with ethanol as reported by the Energy Information Agency. Total U.S. corn use for 2009-'10 was projected at a record 13.0 billion bushels, 980 million bushels higher than the current marketing year. Ending stocks were projected 14 million bushels higher. The 2009-'10 marketing-year average farm price was projected lower at $3.05 to $3.65 per bushel, compared with $3.10 to $3.90 per bushel last month.
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