US front month soybean futures plunged more than 5%, nearing limit down, after USDA upgraded its expectations for US end stocks of soybeans by 10.6% in the 2015/2016 marketing year, almost exactly matching the downgrade to projected exports in Wednesday’s WASDE report.
End stocks are projected at 470mn bu in the new marketing year, up from 425mn bu in July’s forecast. Exports are tipped to drop to 1.725bn bu from July’s 1.775bn bu, with production expectations upped just below 1% to 3.916bn bu on higher yields from a slightly smaller soybean footprint mainly on lower acreage in Missouri.
Export sales projections were marked down on slow export sales commitments to date for the new marketing year, with China’s recent currency devaluations fuelling the likelihood that US exporters will struggle against south American exporters benefiting from cheap currencies as they look to sell from their record harvests.
US domestic crushing figures were edged up to 1.86bn bu from 1.84bn bu a month ago, with biodiesel disappearance expected to consume 5.1mn lb of soybean oil, unchanged from a month ago. USDA marked domestic meal disappearance nearly 2% higher than a month ago, with animal production production forecasted to climb steadily through the second half of 2015 despite a slight MoM downgrade to annual animal production figures.
Higher forecasted US ethanol consumption is expected to consume 25mn bu of additional corn compared to July’s forecasts, with total domestic usage upgraded by 40mn bu, enough to more than compensate for a 1.5% downgrade to corn exports as US sellers struggle against Argentinian and Brazilian rivals. Forecasted end stocks were still raised 7% to 1.7bn bu as USDA raised projected yields by 1.2% to 168.8bu/acre from a steady 88.9mn acre corn footprint.