The prospect that US farmers will plant record soya acreage this spring and lagging export sales have set the stage for the government to peg next year's soya supply at an all-time high, grain analysts said.
The US Agriculture Department on Friday will release its first US soyabean ending stocks forecast for the marketing year that ends on August 31, 2007. "It could be an extremely ugly report with the new-crop," said Randy Mittelstaedt, analyst with Chicago trade house R.J. O'Brien. "They are going to use the March acreage number even if it's too high."
In its March report, USDA said US farmers will reduce corn plantings by 5 percent while seeding record soya acres. The consensus among analysts is that the government will put its 2006/07 US soyabean ending stocks estimate at 683 million bushels - above its April 2005/06 forecast of 565 million, which already represents a record-high supply.
Few changes were expected in the 2005/06 old-crop estimate, with the average analysts estimate at 567 million bushels. The new-crop ending stocks figure is based on USDA's planted acreage figure of 76.9 million acres issued in March and yield estimates of 41 to 42 bushels per acre - down from last fall's national average of 43.3.
While supplies were seen expanding to reflect soyabean production of more than 3.0 billions bushels and record carry-in stocks of around 565 million, demand for US soyabeans should improve in the year ahead, analysts said.
Part of it stems from prospects for increased demand for soyabean oil, a by-product of crushing soyabeans into animal feed, to meet the expanding soya biodiesel market.
But a bigger slice will come from the export side as the weakness in the US dollar to one-year lows against the euro and an eight-month low versus the yen should lift US exports beyond 1.0 billion bushels next year, compared to 900,000 million this season.
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