US soybean stocks to rise, as China import growth slows

February 23rd, 2015

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Category: Grains, Oilseeds

Beans_Corn_Soy_Lentils450x2(Agrimoney) – US soybean stocks will rise to a nine-year high next season, thanks to prospects for another strong harvest and a slowdown in import growth in China, the top  buyer of the oilseed.

The US Department of Agriculture, in its first formal estimates for 2015-16, forecast US soybean inventories ending the season at 430m bushels (11.7m tonnes), the highest since 2006-07 and up 45m bushels year on year.

Although production will likely fall – a reflection of lower yields, after a record result last year, when crops “benefitted from good rainfall and relatively mild temperatures, especially in August” – it will remain historically high, at 3.80m bushels.

It will be enough to outpace consumption, as demand growth slows in both domestic use of soybeans and exports.

‘Competitive pressures’

Exports will rise by a modest 1.7% to 1.82bn bushels, thanks to “limited growth” in world trade at a time of strong supplies in competitor countries.

“Record 2015 South American production will add to the competitive pressures facing US exporters in the coming year,” the USDA said.

Meanwhile, Chinese import growth “after increasing 11% annually for the past 10 years… is expected to slow in 2015-16”.

The USDA stopped short of estimating purchases by China, by far the world’s biggest importer, in 2015-16.

In estimates made in November, but published last week, the department pegged Chinese soybean imports next season at 76.7m tonnes, up 3.6% year on year, after an increase of 5.1% this season.

Corn stocks to drop

The prospect of a rise in US soybean inventories next season contrasts with a forecast of a drop in stocks of corn, the oilseed’s main rival in spring sowings programmes.

Corn inventories were forecast retreating by 140m bushels from this season’s nine-year high to 1.687bn bushels (42.9m tonnes).

Besides lower sowings, the forecast factors in a return to a trend yield, after last season’s record high, and a 100m-bushel rise to 1.85bn bushels in exports.

“World corn production is expected to decline in 2015-16 – however, global import demand is expected to grow,” the USDA said.

“Corn imports by the European Union and Mexico are expected to expand, continuing a strong purchase pace that began a couple years ago.”

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