Report to show lower soy stocks
The U.S. Department of Agriculture on Thursday is likely to project domestic soybean inventories 11.6% lower at the end of the crop's marketing year than it previously forecast, due to strong export demand, according to analysts polled by Dow Jones Newswires.
The USDA figure will be a key cue for soybean futures prices, which have rallied since mid-December on concerns about lower South American output and growing Chinese demand. Soybean futures began easing last week from nearly four-year-high levels. They could jump again, or fall further, based on the USDA's forecasts.
Analysts on average expect the U.S. Department of Agriculture, in a supply-and-demand report due Thursday, to forecast domestic soybean inventories as of Aug. 31 at 221 million bushels, up 2.8% from 215 million bushels a year earlier, but down from the USDA's last forecast of 250 million bushels. Estimates by 19 analysts ranged from 200 million to 250 million bushels.
The USDA is due to release its updated world supply-and-demand tables at 8:30 a.m. EDT Thursday.
Strong, consistent export demand due to smaller supplies in Brazil and Argentina could cut into U.S. stockpiles. Tuesday marked the eighth consecutive trading day that the USDA has reported soybean export sales to China or to "unknown destinations," which traders usually assume means China.
"What you're seeing is just a huge pickup in the pace of exports recently," said Joel Karlin, market analyst with Western Milling. "The U.S. is going to have to supply some of the beans for export."
Thursday's release will also be the first monthly supply-and-demand report to include estimates for the next marketing year. Analysts on average expect the USDA to forecast domestic soybean inventories of 170 million bushels for the end of the 2012-13 marketing year. Estimates ranged from 100 million to 250 million.
The USDA's inventory, or carryout, figures for the current marketing year will still be most closely watched given concerns about current supply levels and room for large changes in coming months to the next year's figures.
For corn, analysts on average expect the USDA to forecast that domestic corn inventories on Aug. 31 will be 758 million bushels, down 32.8% from 1.128 billion bushels a year earlier and 5.4% from the USDA's previous prediction of 801 million bushels. Estimates by 19 analysts ranged from 660 million to 801 million bushels.
Analysts on average expect the USDA to forecast corn inventories at the end of the next marketing year at 1.704 billion bushels. Estimates ranged from 1.209 billion to 2.072 billion bushels.
Traders say current domestic corn supplies are extremely tight, though an expected large U.S. crop would help replenish supplies and ease corn prices later in the year.
For wheat, analysts see the USDA's inventory forecast for the end of the marketing year falling 9.4% to 781 million bushels from 862 million bushels a year earlier, and down 1.5% from the USDA's previous forecast of 793 million bushels. Estimates by 17 analysts ranged from 756 million to 800 million bushels.