Few Changes Expected In USDA Soybean Estimates

Only a few minor tweaks are expected to old- and new-crop soybean balance sheets when the U.S. Department of Agriculture releases its June supply and demand report Thursday.

Analysts surveyed by Dow Jones expect 2009-10 U.S. ending stocks, which represent the amount remaining after all supply and demand factors have been taken into account, to come in at a modest decline from May's figure.

Adjustments to 2010-11 new-crop items will be tied to possible revisions in old-crop ending stocks. Analysts expect the USDA to wait until after the acreage report at the end of the month before adjusting 2010-11 planting and yield outlooks.

The USDA's report is scheduled for release Thursday at 8:30 a.m. EDT (1230 GMT).

The average of analyst's estimates pegs U.S. 2009-10 U.S. soybean ending stocks at 184 million bushels, down 6 million from May's forecast. The estimates ranged between 156 million and 200 million bushels.

The USDA seldom makes significant adjustments in the June report, as it's an in-between month before the June 30 stocks in all positions report, said Bill Nelson, analyst with Doane Advisory Service in St. Louis.

Industry participants anticipate if the USDA makes changes to the 2009-10 balance sheet, it will revise usage figures, with the potential for a modest increase in soybean use for crush and exports.

It's common wisdom that soybean demand has been solid, and based on a very strong export pace, the USDA's shipment projection could be raised by 10 million bushels, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

Anne Frick, senior oilseed analyst with Prudential Bache in New York, said while she anticipates an adjustment in the crush, she sees it expanded only at the expense of residual usage.

"We expect the USDA to retain its old-crop and new-crop U.S. soybean carryover estimates in Thursday's report at last month's 190 and 365 million-bushel levels, respectively," Frick said.

Analysts do not anticipate many changes to the 2010-11 domestic balance sheet in Thursday's report aside from a downward adjustment to beginning stocks, as the market anticipates the USDA will await the June 30 report on acreage before adjusting yield and production figures.

On the usage front, most analysts are keeping their expectations in line with the government's estimates for now. However, potential production increases due to the strong start to the growing season open the door for adjustments down the road, analysts said.

Based off the progression of the 2010 U.S. soybean crop, the USDA could break its historical "hands-off" approach in June, raising yields by two-tenths of a bushel in an effort to send a signal about the 2010 crop, said Roose.

The average of analyst estimates for 2010-11 ending stocks was 359 million bushels, from a range of 235 million to 469 million bushels.

Source: CME Group