USDA ’s monthly supply/demand update raised U.S. soybean  ending stocks reflecting larger expected production, but also raised projected usage due to strong export sales  and favorable crush margins.
The increase in usage was generally expected by the trade, but should limit the negative impact on prices from the larger crop.
USDA pegged 2009-2010 U.S. soybean ending stocks at 270 million bushels, up 35 million from its previous estimate and toward the high end of trade expectations that averaged 235 million bushels in a range from 180 million to 300 million bushels.
The 69-million-bushel increase in U.S. soybean production to 3.319 billion bushels was partly offset by a further 20-million-bushel increase in projected U.S. exports and a 5-million-bushel increase in the projected U.S. soybean crush.
USDA now projects U.S. soybean exports at a record high 1.325 billion bushels, up 42 million bushels from last year and pegs the crush at 1.695 billion bushels, up 33 million from last year.
Despite raising projected ending stocks, USDA raised its projected range for the average U.S. on-farm price of soybeans to $8.20-10.20 from a previous estimate of $8-10, citing higher corn  and soybean futures prices as the reason.
U.S. exports were raised in large part due to continued strong Chinese demand for soybean imports. In its world soybean balance sheet, USDA raised projected Chinese imports by 1 million metric tons (mmt) to 40.5 mmt.
U.S. exports were raised despite an increase in projected South American production and expected world soybean ending stocks.
USDA raised its estimate of Brazil ’s soybean crop by 1 mmt to 63 mmt and boosted Argentina’s projected crop by 500,000 tons to 53 mmt.
USDA raised its projection of world soybean ending stocks for 2009-2010 by 2.6 mmt, or 4.7%, to 57.39 mmt and now sees world stocks rising by more than 35% from last year.
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.