USDA Outlook: U.S. soybean exports forecast to reach 1.485 billion bushels in 2012/2013--down 20 million bushels from previous estimate--as higher soybean demand pushes down available supplies

Andrew Rogers

WASHINGTON , June 13, 2012 (press release) – The following article is excerpted from the June Oil Crops Outlook published by the Economic Research Service of the USDA.

Domestic Outlook

Firm Old-Crop Soybean Demand Seen Lowering Carryover Stocks for 2012/13

U.S. soybean exports could accelerate as soon as August. Typically, that seasonal upswing does not start until after the start of the new-crop harvest in September. But this year, competing supplies from Brazil and Argentina could be sharply restricted. Soybean importers—particularly in China—have kept up an unusually high level of U.S. purchases for summer delivery. USDA forecasts 2011/12 export shipments up 20 million bushels this month to 1.335 billion.

The 2011/12 soybean crush is forecast 15 million bushels higher this month to 1.66 billion based on higher demand for soybean meal. USDA raised its forecast of U.S. production of broiler chickens for 2012 based on heavier bird weights. Even so, U.S. feed rations have incorporated a surprisingly high level of soybean meal in 2011/12 considering the marginal increase in the number of animals being fed. The explanation may lie in the below-average protein content of the 2011 soybean crop. That means higher inclusion rates for soybean meal are being required in feed rations this year to attain the desired overall level of protein. Based on year-to-date use, USDA raised its 2011/12 forecast of domestic soybean meal use by 300,000 short tons to 31.2 million.

At the same time, more subdued foreign competition is generating steady sales of soybean meal abroad. For October 2011-April 2012, exports of soybean meal from Argentina (the world’s top exporter) have slightly lagged the previous year’s pace because of a slower rate of crushing. The U.S. export forecast for soybean meal was raised to 9.2 million short tons from 9.1 million last month.

Higher soybean demand would further reduce U.S. season-ending stocks for 2011/12 to 175 million bushels, compared to last month’s forecast at 210 million. As a consequence, the projected total supply of soybeans for 2012/13 would also tighten by 35 million bushels, making previous forecasts of exports and domestic use less attainable. USDA lowered its 2012/13 forecast of U.S. soybean exports by 20 million bushels to 1.485 billion. Domestic crush was also forecast lower—by 10 million bushels to 1.645 billion. The 2012/13 outlook for processors is dampened by a scaled back forecast of domestic soybean meal consumption (to 30.9 million short tons from 31.2 million last month). This latest forecast assumes a more typical protein level for this year’s soybean crop. Even with these reductions in soybean use, season-ending stocks could also fall to a barely minimal level of 140 million bushels—down 5 million from last month’s forecast. U.S. soybean stocks as a percentage of total use for 2012/13 would fall to 4.3 percent, a level that would cover only 16 days of use.

Soybean planting this spring has proceeded at one of the fastest rates ever. As of June 10, 97 percent of the 2012 U.S. soybean crop had been sown, well ahead of the 5-year average of 85 percent. Crop emergence at 90 percent is also well advanced. Double-cropped soybeans account for much of the remaining crop to be planted and will be sown once the winter wheat crop is harvested. Planting could be concluded quite soon in these final few locations as the winter wheat harvest is also more advanced than usual this year. At this early stage of development, there are no major concerns for the overall soybean crop, with 60 percent rated in good-to- excellent condition. For the upper Midwest, soil moisture levels are much improved from a few months ago. However, moisture deficits have increased for other parts of the Corn Belt this spring where it was considerably drier than average. Growers there would welcome rain now that planting is almost finished.

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