The U.S. Department of Agriculture (USDA) issued its latest view of the U.S. and global crop outlooks on November 8. The report included analysts’ views as of late October, which is just two months into the 2018/19 U.S. soybean marketing year. At this early stage in the marketing year, there were some minor adjustments to the supply side of its soybean balance sheet. Latest harvest results suggested a slightly smaller, but still record, U.S. soybean crop at 4.6 billion bushels. There were slight reductions to both yields and harvested area, but the crop is expected to remain 4 percent above last year’s results. The feature of this month’s report was a sizeable downward revision of 160 million bushels to USDA’s export projection. Accumulated shipments and outstanding sales at this early point in the marketing are lagging recent years, spurring analysts to trim current expectations. The U.S. has seen steady growth in shipments in recent years, but larger supplies this year following a record soybean crop in Brazil have shifted demand that would have otherwise gone to the U.S.
While the growing stocks are not helping producers, the abundance of supplies has proven to be an opportunity for the U.S. to ship soybeans to non-traditional markets. There have also been several reports of farmers taking a break from harvest activities this fall to host new international buying groups and show buyers the quality of U.S. soybeans. With limited domestic capacity to crush soybeans, the current market dynamics are expected to provide opportunities for the U.S. to make in-roads in new markets in the 2018/19 marketing year. The chart that follows shows the recent trend of U.S. soybean exports as the U.S. has broadened its customer base beyond the world’s largest buyer, China.