USDA raises soy production, export estimates

Web exclusive posted Jan. 14, 2009, at 10:45 a.m. CST

In its Jan. 12 World Agricultural Supply and Demand Estimates report, the USDA inched its soybean production estimates upwards for the 2008-'09 crop. Two other reports, also issued Jan. 12, showed U.S. soybean stocks are down 4 percent compared to the previous year, however, the 2008 soybean production was the fourth highest historically.

U.S. soybean production was estimated at 2.96 billion bushels, up 39 million bushels from last month based on both higher yields and harvested area. Soybean exports were raised 50 million bushels to 1.1 billion due to strong sales and shipments to China. Projected soybean crush was reduced 30 million bushels to 1.68 billion bushels reflecting sharply reduced domestic soybean meal consumption. Soybean ending stocks were projected at 225 million bushels, up 20 million. Lower soybean oil production was more than offset by reduced domestic consumption and exports, leaving projected soybean oil stocks at 2.1 billion pounds, up 110 million from last month's projections. The USDA left its projections unchanged for soy oil use for methyl ester at 3.1 billion pounds, compared with estimates of 2.99 billion pounds for 2007-'08.

The U.S. season-average soybean price at the farm gate for 2008-'09 was projected to range between $8.50 to $9.50 per bushel compared with $8.25 to $9.75 per bushel last month. Soybean oil prices were forecast at 32 to 35 cents per pound, up 1 cent on the bottom of the range.

Crop production
In the USDA crop production summary, soybean production in 2008 totaled 2.96 billion bushels, up 1 percent from the November forecast and up 11 percent from 2007. The average yield per acre was estimated at 39.6 bushels, 0.3 bushel above the November forecast but 2.1 bushels below last year's average yield. Harvested area was up 16 percent from 2007, to a record 74.6 million acres.

Grain stocks report
In the grain stocks report, soybeans stored in all positions on Dec. 1, 2008, totaled 2.28 billion bushels, down 4 percent from Dec. 1, 2007. Soybeans stored on farms totaled 1.19 billion bushels, up 5 percent from a year ago. Off-farm stocks, at 1.09 billion bushels, were down 12 percent from last December. Indicated disappearance from September through November 2008 totaled 889 million bushels down slightly from the same period a year earlier.

On-farm storage capacity increased 2 percent from the previous year, at 12 billion bushels. Iowa leads all states with 1.95 billion bushels on-farm storage capacity, followed by Illinois with 1.37 billion bushels and Minnesota with 1.3 billion bushels.

Off-farm grain storage capacity on Dec. 1 totaled 9.35 billion bushels, up 3 percent from the previous year. The largest increase occurred in Iowa where 125 million bushels of capacity was added in the past year. Other notable increases were shown in Illinois and Minnesota, where capacity increased 57 million bushels and 30 million bushels, respectively. Two states, Kansas and California, saw decreases in capacity around 5 million bushels each.

WASDE global projections
Globally, the WASDE report lowered projections for the soybean crops, down 1.5 million tons to 233.2 million tons, mostly due to dry conditions in South America. Argentina's soybean crop was projected at 49.5 million tons, down 1 million. Soybean production for Paraguay was reduced 0.9 million tons to 5.6 million tons due to unusually dry, hot weather reducing yield potential. Slight increases in production prospects elsewhere offset some of the South American yield decline.