The U.S. Department of Agriculture (USDA) released its June World Agricultural Supply and Demand Estimate (WASDE) report on Tuesday, June 11. In its global production forecast for 2019/20, USDA forecast soybean output at 355.39 million metric tons (MMT), little different from 355.66 million tonnes issued last month. That compares to the latest estimate of 2018/19 production of 362.08 million tonnes. There were no changes to the Argentine and Brazilian production forecasts this month for 2018/19, and it was somewhat surprising to see that neither the 2019/20 marketing year U.S. soybean plantings nor yield expectations changed this month. It is likely, instead, that USDA will wait for guidance from the June 28 scheduled annual acreage report before adjusting U.S. output in the agency’s July WASDE as the agency also noted in the oilseeds section of the WASDE copy that “although adverse weather has significantly slowed soybean planting progress this year, area and production forecasts are unchanged with several weeks remaining in the planting season.”
With respect to the most important metrics for the world soybean demand, USDA is forecasting total 2019/20 demand of 355.31 million tonnes. That is up from 347.25 MMT in 2018/19 but off slightly from 355.42 MMT in May. Much attention remains on Chinese demand, given its battles with African Swine Fever that is devastating a large portion of its hog herd since reports of the virus surfaced last summer. USDA forecasts China’s domestic use at 103.70 MMT, up marginally from 2018/19 at 103.10 MMT. Excluding China, USDA forecasts all other foreign domestic use at 190.51 MMT and up from 183.49 MMT in 2018/19. Soybean demand is seen higher in 2019/20 in both Southeast Asia and Mexico.
Turning the focus to world trade, USDA forecasts 2019/20 global imports at 150.82 MMT. 2018/19 imports are said to be on pace to total 148.56 MMT. In 2017/18, they totaled 152.92 MMT. It is well-documented that Chinese import demand has been under pressure as well from dealing with African Swine Fever. China’s soybean imports totaled 94.1 MMT in 2017/18, are tracking to 85.0 MMT (off 1 MMT from last month) in 2018/19, and USDA projects 87.0 MMT for 2019/20. Excluding China, USDA forecasts all other foreign imports at 63.27 MMT, 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 46.27 in 2018/19, Argentina at 7.00 MMT versus 7.75 MMT, and Brazil at 75.00 MMT versus 78.50 MMT.
USDA’s forecast for 2019/20 world soybean stocks is at 112.66 million tonnes, down minimally from the revised 2018/19 forecast at 112.80 million. USDA forecast 2019/20 world soybean stocks at 113.09 million tonnes as recent as May. Despite the slight reduction in projected ending stocks projected this month, global soybean supplies do not appear to be at risk of tightening considerably and the global situation appears poised to absorb even a modest shortfall in the U.S. should late plantings negatively impact the production potential of U.S. soybean output later this summer.
