The USDA said Friday bumped up its forecast for U.S. soybean exports and dropped its prediction for ending stocks as Chinese demand remains strong and competition from Brazil is less than expected.
The United States is now expected to ship 2.17 billion bushels of soybean exports in the 2021-22 marketing year, up from USDA’s May forecast of 2.14 billion, and the carryout is now estimated at just 205 million bushels, according to the latest World Agricultural Supply and Demand Estimates report.
Arlan Suderman, chief commodities economist for StoneX Group, expects USDA to continue to lower that estimate for carryout stocks as China continues to snap up more U.S. soybeans.
“That’s based on the smaller crop in Brazil and better than expected demand in China,” Suderman said. China, he added, is buying now to replenish its stockpiles.
“There’s a difference between what immediate demand is and what China wants to do,” he said. "They’re worried about tight stocks and their reserves are low.”
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The 30 million-bushel increase to USDA soybean export forecast for the old crop at this time of year is not common, said Mac Marshall, vice president of market intelligence at the United Soybean Board and U.S. Soybean Export Council.
“This revision this late in the marketing year is reflective of the strong counter-seasonal pace of exports as shipments out of Brazil are down from prior year levels due to the smaller crop,” Marshall said. “We’re seeing continued strength in purchasing from China as well as smaller but growing markets in Egypt, Mexico, and Pakistan.”
Brazil – the largest soybean producer and exporter in the world – harvested just 126 million metric tons this year, down from 139.5 million last year. Brazil hasn’t begun planting next year’s crop yet, but USDA is already predicting a bumper crop in 2023 of 149 million metric tons.
Overall, the June WASDE report was relatively uneventful and contained no major surprises, said Suderman. The industry's focus now shifts to the annual Acreage report, due out June 30, "and the developing weather story in the Midwest, with forecast models shifting to hotter and drier than normal," he said.