USDA lowered its estimate of 2007 U.S. soybean production and ending stocks a bit further on Friday morning, while sharply raising its expectations for 2007-2008 U.S. soybean prices.
USDA’s monthly crop production report pegged 2007 U.S. soybean production at 2.592 billion bushels, down 4 million bushels from its previous estimate.
The monthly supply/demand update lowered projected 2007-2008 U.S. ending stocks to 210 million bushels from a previous estimate of 215 million and raised the expected range for the U.S. average on-farm price of soybeans by 65¢/bu. at both ends to $8.50-9.50.
The production number was a mild surprise, with most trade analysts looking for a small increase in the crop size. Trade production estimates averaged 2.606 billion bushels in a range from 2.573 to 2.662 billion bushels.
USDA lowered its estimated national soybean yield fractionally to 41.3 bu./acre from a previous estimate of 41.4 bu. Trade yield estimates averaged 41.5 bu.
The cut in production and stocks may not be large enough to have a big initial impact on soybean futures, but will add fundamental support for a market that is already nervous about tight supplies.
USDA’s world soybean supply/demand balance sheet was also a bit friendly for the market as USDA lowered projected 2007-2008 world ending stocks by 1.4 million metric tons.The change lowered the projected world carryout below the 50 million metric ton level to 49.32 million tons. The change was largely due to a downward revision in the estimated old-crop carry-in. Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.