U.S. Ending Stocks are a Barometer for Global Soybean Supply and Demand

As the world's residual supplier of soybeans, U.S. ending stocks provide an indication of the global supply and demand for soybeans. In this role the United States will hold the majority of soybean stocks among major exporters during a time of abundant global supplies and low prices. U.S. soybean stock levels are forecast to end the year around 12 percent of use, the largest level since August 2007. Contrastly, stocks in Brazil were nearly depleted prior to the current harvest and are forecast to be at less than 1 percent of use.

Further evidence of the United States as a residual supplier can be seen when comparing the annual changes in U.S. soybean export volume to Brazil's exports as well as the global import demand for soybeans. Over the past 5 years, the annual export growth of Brazil soybeans remained relatively consistent and in line with expanding domestic acreage and production. U.S. exports, in contrast, have been more variable, reflecting both the strengthening or weakening of global import demand, and the export availability and competitiveness of Brazilian soybeans. Therefore, year-end stock levels of soybeans in the United States are highly dependent upon global supply and demand factors.

OVERVIEW

Global soybean production is slightly lower this month on reduced estimates for India and China that more than offset gains in Argentina and the European Union. Exports are raised on greater shipments from Brazil and the United States more than offsetting reductions in Argentina and India. Imports are boosted this month with growing demand in China, Japan, Bangladesh, and Iran. Global stocks are slightly higher this month reflecting increased levels in Argentina and China.

The U.S. season-average farm price is unchanged.

SOYBEAN PRICES

U.S. export bids in March, FOB Gulf, averaged $345/ton, unchanged from last month.

As of the week ending March 31, U.S. 2015/16 soybean export commitments (outstanding sales plus accumulated exports) to China totaled 26.8 million tons compared with 29.6 million a year ago. Total commitments to the world are 44.5 million tons, compared with 48.2 million for the same period last year.

2015/16 TRADE CHANGES

  • U.S. soybean exports are raised by 408,000 tons to 46.4 million reflecting stronger global soybean imports led by China.
  • Argentina
    • Soybean exports are lowered 400,000 tons to 11.4 million in response to strong competition from Brazil and strong demand by local processors.
    • Soybean oil exports are up 200,000 tons to 6.1 million in response to competitive pricing and narrow premiums to palm oil.
  • Bangladesh soybean imports are up 150,000 tons to 1.2 million on the strong pace of trade in first half of its marketing year.
  • Belarus soybean meal imports are lowered 100,000 tons to 370,000 on the slow pace of trade in the first quarter of the marketing year.
  • Brazil soybean exports are boosted 1.5 million tons to 59.5 million on strong demand, rincipally from China.
  • China
    • Soybean imports are raised 1.0 million tons to 83.0 million on a strong pace of trade in the first half of its marketing year.
    • Sunflowerseed oil imports are increased by 100,000 tons to 500,000 on strong demand for food use and a strong pace of trade in the first half of the marketing year.
    • Palm oil imports are increased 100,000 tons to 5.6 million on the strong pace of trade in the first and second quarters, a reflection of growing industrial demand.
    • Fish meal imports are raised 100,000 tons to 1.1 million in line with the previous marketing year.
  • Egypt soybean meal imports are boosted 340,000 tons to 1.5 million and reflecting the strong pace of trade, mainly from Argentina.
  • European Union
    • Soybean oil imports are up 100,000 tons to 250,000 in response to a strong pace of trade in the first quarter and in line with last year.
    • Palm oil imports are down 250,000 tons to 6.7 million as demand for vegetable oils in biodiesel production is expected to decrease and be replaced by waste oils and animal fats.
    • Sunflowerseed meal imports are lowered by 200,000 tons to 3.3 million due to the slower pace of trade in first quarter.
  • India soybean exports are halved to 100,000 tons, reflecting smaller crop estimates and continued weak export volumes.
  • Indonesia
    • Soybean meal imports are reduced 150,000 tons to 4.4 million in response to weaker imports to date.
    • Peanut imports are reduced by 100,000 tons to 250,000 on stable trade and to match the previous marketing year.
  • Iran soybean imports are raised 450,000 tons to 1.8 million while soybean meal imports fall 400,000 tons to 1.7 million, reflecting a growing preference for domestic crush.
  • Japan soybean imports are up 200,000 tons to 3.1 million reflecting a strong pace of trade and increased crush.
  • Malaysia palm kernel oil imports are increased 160,000 tons to 370,000 following strong first-quarter trade.
  • Mexico soybean imports grew by 100,000 tons to 4.0 million reflecting increased purchases from the United States.
  • UAE imports of rapeseed are reduced 100,000 tons to 725,000 in response to a slower trade pace throughout three quarters of the marketing year.
  • Venezuela soybean meal imports are lowered 150,000 tons to 1.1 million as economic conditions impact purchases.
  • Vietnam soybean imports are reduced 100,000 tons to 1.7 million on the slow pace of trade at the beginning of its marketing year.