WASDE: Soybean production, stocks down

Web exclusive posted August 12, 2008 at 3:33 p.m. CST

The sharp decline in oilseed and other commodity prices over the past month has resulted in the USDA's Aug. 12 World Agricultural Supply and Demand Estimate report forecasting a drop in average soybean and product prices. That comes in spite of the USDA moving its production estimates for soybeans downward in the United States from last month's report. However, world oilseed production is forecast to be at a record high.

The first survey-based forecast of U.S. soybean production is down 27 million bushels from the July projection at 2.973 billion bushels � 388 million bushels above last year's crop. Soybean yields are forecast at 40.5 bushels per acre, down 1.1 bushels from last month's trend yield projection. Soybean stocks are down 5 million bushels from last month at 135 million bushels as reduced supplies are only partly offset by a lower crush. Soybean crush is reduced 15 million bushels due to lower domestic use and exports of soybean meal.

USDA projects the season-average soybean price for 2008-'09 at $11.50 to $13 per bushel, down 50 cents on both ends of the range from the previous month. Soybean meal prices are projected at $330 to $390 per ton and soybean oil prices are projected at 54 to 58 cents per pound, down 5 cents on both ends of the range.

Global oilseed production for 2008-'09 is projected at 416.1 million tons, down 1.2 million tons from last month, but still record high. Soybean production for Brazil is reduced 1.5 million tons to 62.5 million tons due to lower area projections reflecting sharply lower soybean futures prices. Argentina soybean production is raised 1.5 million tons due to a record 49.5 million tons on higher area. Projected area is raised partly due to the impact of dry weather on winter wheat planting in the main soybean producing areas. India soybean production is projected at 9.1 million tons, up 0.4 million based on higher area. Planted area reported through late July indicates higher-than-expected soybean plantings this year.

Other oilseed projections globally indicate higher rapeseed production in the Ukraine where harvest reports have raised projections 0.4 million tons to 2.8 million tons. Global sunflower seed production is projected higher due to increased harvested area for Argentina, Russia and Ukraine. China soybean imports are raised 0.5 million tons to 36 million tons compared with a revised estimate of 35.4 million tons for 2007-'08.

The dynamics of the competition among crops will change this year with USDA projecting record global wheat production of 670.8 million tons, 60.2 million higher than last year. The U.S. corn crop is projected to be the second largest in history at 12.3 billion bushels, an increase of 573 million bushels from the previous month, due to higher forecast yields based on nearly ideal growing season weather across much of the Corn Belt since late June.