The U.S. Department of Agriculture (USDA) issued its preliminary regular look ahead to the 2019/20 world soybean outlook on Friday, May 10. In its initial global production forecasts for 2019/20, USDA forecasts them at 355.66 million tonnes and that compares to 2018/19 production of 362.08 million tonnes. The 2018/19 May forecast is adjusted from the April forecast at 360.58 million tonnes. It is interesting to review USDA’s first 2019/20 production forecasts for the major world soybean producers in comparison to the latest 2018/19 forecasts. USDA forecasts the U.S. at 112.95 million compared to 123.66 million metric tons (MMT) in 2018/19, Argentina at 53.00 MMT versus 56.00 MMT, Brazil at 123.00 MMT versus 117.00 MMT, and China at 17.00 MMT versus 15.90 MMT.

With respect to the most important metrics for the world soybean demand, we find USDA forecasting total 2019/20 demand of 355.42 MMT and that is up from 347.25 MMT in 2018/19. There is a lot of attention placed on Chinese demand, given its battles with African Swine Fever (ASF), which is devastating a large portion of its hog herd. USDA forecasts its domestic use at 103.70 MMT and that is up from 2018/19 at 103.10 MMT. Excluding China, USDA forecasts all other foreign domestic use at 190.63 MMT and up from 183.49 MMT in 2018/19. USDA forecasts 2019/20 global imports at 150.82 MMT. USDA says 2018/19 imports are on pace to total 149.56 MMT. In 2017/18, they totaled 152.92 MMT. Chinese import demand has been under pressure as well from dealing with ASF. Its imports totaled 94.1 MMT in 2017/18, are tracking to 86.0 MMT in 2018/19, and USDA projects 87.0 MMT for 2019/20. Excluding China, USDA forecasts all other foreign imports at 63.27 MMT and slightly up from 63.09 MMT in 2018/19. On the export side, USDA forecasts U.S. 2019/20 exports of 53.07 MMT versus 48.31 in 2018/19, Argentina at 7.00 MMT versus 6.30 MMT, and Brazil at 75.00 MMT versus 78.50 MMT.

USDA’s initial forecast for 2019/20 world soybean stocks is at 113.09 million tonnes and that is down minimally from the revised 2018/19 forecast at 113.18 million. Last month, USDA forecast the 2018/19 world soybean stocks at 107.36 million tonnes. That 2018/19 forecast is up 5.82 MMT from last month. Some of the significant changes from last month included an upward revision to the Argentine production and ending stocks, an increase in the U.S. carryout, and an increase in the forecast for Brazil’s ending stocks. USDA sees Brazil exporting fewer soybeans, presumably fewer to China where USDA lowered its import forecast by 2 MMT. USDA is forecasting that the 2019/20 global stocks-to-use ratio, a measure used to determine the market’s ability to absorb pressure from either excess supplies or increased demand, is expected to remain comfortable at 31.82 percent. This is slightly lower from the current marketing year record forecast, but suggests that there are ample global soybean supplies compared to expected demand.