Higher-than-expected US soyabean yields and a lagging pace in exports should lead the US Agriculture Department to raise its estimates of this year's soya production and ending stocks, analysts said.
"This is one where we know the supply is large and it comes to a point of how big is big. The other side of it is, can demand improve at all," said Don Roose, analyst with US Commodities in West Des Monies, Iowa.
USDA will issue its monthly forecasts for US and world grains and oilseed crops on Thursday morning.
The consensus among analysts is that the government will raise its projection of the 2005 US soya crop by 57 million bushels to 3.024 billion bushels - making it the second largest soya harvest in US history. That crop size reflects an average yield of 42.4 bushels per acre, compared to 41.6 bushels/acre forecast in October by USDA.
The average US analyst estimate for the amount of soyabeans left on-hand at the marketing year end on August 31 was raised by the same amount, 57 million bushels to 317 million.
The jump in stocks is due to a bigger crop and a slower export pace. But the increase in stocks could be tempered by a hike in the domestic crush to meet soyameal demand for US feed rations.
Analysts anticipating a cut in soyabean exports point toward the lagging US export pace from a year ago, especially with the USDA forecasting higher exports in 2005/06 versus last year.
"They'll be watching what the crop size is and look and see whether they lower the bean exports, 20 to 40 million ... just based on the slow pace," said analyst Dan Cekander with Fimat Futures.
Since the start of the marketing year on September 1, there have been 190.1 million bushels of US soyabeans inspected for export compared with 234.8 million a year ago.
Demand from China, the top global soyabean buyer, is down about 25 percent from a year ago. That has some analysts anticipating USDA will not only cut its US export projection but trim Chinese imports by roughly 500,000 tonnes.
Prospects that US exports of poultry and pork will rise as Asia and Europe cull poultry flocks due to the deadly bird flu prompted some analysts to hike their estimates for US feed usage.
"I would look for the crush to go up 20 to 25 (million bushels) in beans," said Roy Huckabay, analyst with The Linn Group, a Chicago trade house.
"What happens is that as the world culls its bird flocks we do more export business in pork and in poultry," Huckabay said.
Thursday's report will also give the USDA's 2004/05 end stocks for soyameal and soyaoil. Meal stocks should be down 88,000 tons from last month and soyaoil up 120 million lbs based on the most recent US Census Bureau data. The bigger soyaoil stocks estimate could spill over to a larger 2005/06 soyaoil stock forecast, analysts said.
In world numbers, USDA could cut its Brazilian crop estimate by 1 million-2 million tonnes from its 60-million-tonne projection due to fewer planted acres.