Soybean ending stocks increasing strongly

In Germany, UFOP reports that world soybean production in the 2018/19 marketing year will likely be higher than previously expected. Since Chinese demand is shrinking, stocks could surge to a record high.

In its September report, the USDA raised its estimate of global soybean production for 2018/19 by 2.2 million tonnes to 369.3 million tonnes. This would be up 32.5 million tonnes from the previous marketing year. With a forecast bumper crop of 127.7 million tonnes, the US is seen to be the largest soybean producer. According to the USDA outlook, 2018/19 global consumption is likely to exceed the previous year’s level by 16 million tonnes. Nevertheless, the volume of soybeans processed of 353 million tonnes would still be 16 million tonnes smaller than the tonnage harvested.

According to an Agrarmarkt Informations-Gesellschaft (AMI) estimate, global ending stocks will likely exceed the previous year’s figure substantially at the end of the marketing year. Based on the current forecast of 108 million tonnes, the increase would amount to around 13 million tonnes compared to 2017/18, resulting in the largest ending stocks in history. Just in June 2018, ending stocks were only forecast at 87 million tonnes. China will still be the world’s most important soybean importer in 2018/19. At 94 million tonnes, imports are projected at the previous year’s level. The stagnation in soybean imports is due to the trade dispute with the US. Just a few months ago, USDA projected Chinese soy imports at more than 103 million tonnes.