WASDE: Soy ending stocks could be lowest in 15 years

USDA projected U.S. soybean ending stocks could be at their lowest at the end of the current marketing year since 2003-'04, due to strong exports and a reduced South American crop offsetting weaker domestic demand. While that boosted USDA's price projections for the soybean sector, it amounted to a modest increase of 1.5 cents per pound on the low end of its price forecast for soy oil to a range of 30 to 32 cents per pound for the 2008-'09 marketing year. The U.S. season-average soybean price range for 2008-'09 was projected at $9.25 to $10.05 per bushel compared with $8.85 to $9.85 per bushel last month. The soybean meal price range was narrowed to $280 to $300 per short ton compared with $265 to $305 last month.

USDA made the adjustments to its market projections in its April 9 World Agriculture Supply and Demand Estimates report. U.S. soybean exports for 2008-'09 were increased 25 million bushels to a record 1.21 billion reflecting strong year-to-date shipments and outstanding sales, and prospects for reduced export competition from South America as the Argentina soybean crop continued to deteriorate. Soybean crush was reduced 5 million bushels to 1.635 billion due to persistent weakness in domestic soybean meal demand. Seed use was raised reflecting expected plantings for 2009 reported in the March 31 Prospective Plantings report. U.S. soybean ending stocks were reduced 20 million bushels to a projected 165 million, the lowest since 2003-'04.

USDA's projections for soy oil use in biodiesel production remained unchanged from the previous month at 2,200 million pounds compared to 2,762 million pounds in 2006-'07 and 2,981 million pounds in 2007-'09. Projected ending oil stocks were reduced slightly from 2,778 million pounds from the last report to 2,748 million pounds.

Global oilseed production for 2008-'09 was projected at 403.5 million tons, down 4.2 million tons from last month. Lower soybean, cottonseed and sunflower seed production were only partly offset by increased rapeseed and peanut projections. Global soybean production was reduced 4.5 million tons to 218.8 million, with Argentina accounting for most of the reduction. Soybean production for Argentina was projected at 39.0 million tons, down 4 million due to lower harvested area and yields. Despite rain in much of the main growing area in early March, hot, dry conditions returned in most of the country, leaving yield prospects below last month.

Soybean production was also reduced for Paraguay and India. Soybean production for Brazil remained unchanged at 57 million tons. Global rapeseed production was raised 0.4 million tons to a record 57.9 million due to higher projected output in India. Global 2008-'09 oilseed ending stocks were reduced 4.1 million tons to 58.6 million due mostly to lower soybean stocks in Argentina, Brazil, and the United States.