AgResource estimates US soybean stocks as of December 1st at 3,189 Mil Bu, a 291 Mil Bu (10%) increase over last year. As reflected in the table, the carryin supply was the largest in a decade, and was followed by a record large US soybean harvest. Imports have been rather routine, and total soybean supplies for the quarter are estimated at 4,730 Mil Bu – a 5% increase over a year ago. While supplies have increased, total usage through the quarter moved the other direction and was down 5% year over year, further adding to the US soybean stockpile.
Quarterly crush and exports are approximately known and the combined usage rate is estimated to have been just short of last year’s record. All of the decline in usage through the quarter is attributed to a slower export rate. US Sep-Nov exports are estimated at 850 Mil Bu or 75 Mil Bu under last year’s record setting shipment pace. While world trade through the period was up, Brazil exported more beans and captured a larger share of global business.
The quarterly crush rate is estimated at a record large 495 Mil Bu, or 10 Mil Bu more than a year ago. Adequate supplies and strong crush margins allowed processors to ramp up production and maintain a strong processing rate through harvest. The quarterly residual rate is always a wild card, when estimating quarterly usage rates. 1st quarter residual in the last several years has been from 12-20% of total use. Based on the larger crop size, we estimate a quarterly residual of 195 Mil Bu versus 189 last year. The US soybean crop could decline.
The chart shows that December 1st soybean stocks will likely be 291 Mil Bu (10%) larger than a year ago, and will be the largest December 1st stocks figure on record. Quarterly stocks as a percentage of quarterly use, is estimated to increase 26 percentage points to 207%, or the larges in 6 years, but still historically low due to strong usage rates.
US soybean prices continue to trade close to $.75/bu cheaper than a year ago. Spot prices are holding just above the seasonal low that was traded back in September, as the market waits on the S American crop development.
Through last week, Argentina still had 30% of the crop to plant, while large sections of the key growing regions have seen have seen rainfall totals at 50% or less of normal.
Weather risk for the S American crop remains, and its premature to adjust US soybean exports lower until its assured that this year’s S American crop will surpass the ’17 harvest.
