World soy stocks exceed global expectations

Production in Brazil and Argentina higher than anticipated, resulting in stocks 3 percent higher than projected

CHICAGO (Reuters) — Global soybean supplies will be bigger than previously forecast due to increased harvest expectations in Brazil and Argentina, the U.S. government said earlier this week.

World soybean ending stocks for the 2019/20 marketing year were pegged at 102.44 million tonnes, according to the U.S. Agriculture Department’s World Agricultural Supply and Demand Estimates report. That compares with the USDA’s February forecast of 98.86 million tonnes.

Analysts had been expecting the monthly report to show soybean stocks of 99.33 million tonnes.

The larger supplies forecast comes at a time the global economy is on edge over the spread of coronavirus, adding uncertainty to global demand for agricultural goods.

USDA projected the Brazil soybean harvest at 126 million tonnes, up one million from its previous estimate and at the high end of market expectations. Argentine soybean production also was seen up one million tonnes, at 54 million.

The government also bumped its world corn ending stocks outlook to 297.34 million tonnes from 296.84 million tonnes.

“The world numbers carried more excitement than anything, but those had a bearish spin,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

Corn and soybean futures showed little reaction to the report, remaining strong on a rebound from sharp declines March 9.

“The USDA numbers clearly have been overwhelmed by the macro conditions right now,” said Global Commodity Analytics analyst Mike Zuzolo. “It’s everything, from the coronavirus spread to the Trump stimulus statement.”

USDA left its outlook for domestic ending stocks unchanged, at 1.892 billion bushels for corn and 425 million bu. for soybeans.

It also kept its export projections steady, surprising analysts, who have noted weekly shipment totals lagging the pace needed to meet the yearly forecast.

“U.S. corn exports, unless something changes quickly, are 100 million (bu.) too high,” U.S. Commodities’ Roose added. “Soybean exports, with the pace we’re at, are 150 million too high.”

USDA forecast U.S. soybean exports at 1.825 billion bu. and U.S. corn exports at 1.725 billion bu. In February, the government had increased the soybean export forecast by 50 million bu. following the signing of a Phase 1 trade pact between the United States and China.

Domestic ending stocks of wheat were unchanged, at 940 million bu., and global ending stocks were trimmed to 287.14 million tonnes from 288.03 million tonnes due to record import demand from Turkey and Bangladesh.


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