The soybean  market got distinctively mixed signals from last Wednesday’s monthly USDA  supply/demand as USDA raised its estimates of U.S. soybeans stocks due to slowing export demand, but also raised its forecast for 2011-2012 soybean prices sharply.
USDA raised its estimate of the 2010-2011 U.S. soybean carryout by 10 million bushels to 180 million bushels compared with pre-report estimates averaging 173 million bushels in a range from 142 million to 195 million bushels.
The agency cut projected 2010-2011 U.S. soybean exports by another 10 million metric tons (mmt) to 1.540 billion bushels due to stronger-than-expected South American competition and slower-than-expected Chinese import demand.
The projected 2010-2011 U.S. soybean crush was not cut by USDA, even though crushings continued to lag the forecast pace through the end of April.
USDA also raised its 2011-2012 soybean carryout forecast by 30 million bushels, or 18.8%, to 190 million bushels, compared with trade expectations averaging only 165 million bushels in a range from 124 million to 200 million.
Projected 2011-2012 U.S. soybean exports were lowered by 20 million bushels to 1.520 billion bushels. USDA did not make any changes to its 2011 soybean crop projection.
Despite the drop in projected export demand, USDA raised its forecast range for the average U.S. on-farm price of soybeans by $1 on both ends to $13-15/bu.
USDA sees higher corn prices leading the soybean market higher as the two crops compete for acreage.
USDA raised its estimate of the 2010-2011 world soybean carryout by another 720,000 metric tons to a record 64.53 mmt, with increases in world usage only partially offsetting increases in expected production.
Brazil’s 2010-2011 crop is now seen at 74.5 mmt, up 1.5 mmt from USDA’s previous estimate, but still 500,000 tons below Brazil’s official estimate. USDA also cut China’s projected 2010-2011 imports by another 500,000 tons to 54 mmt.
Despite raising its 2010-2011 world soybean carryout and forecasting larger U.S. ending stocks for 2011-2012, USDA lowered its forecast for the 2011-2012 world soybean carryout slightly to 61.59 mmt. World production for next year was lowered slightly, while projected demand was raised.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.