USDA's Feb. 9 supply-demand estimates confirmed lower soybean production in Argentina and Brazil, but the South American crop projections didn't fall as far as private estimates.
"We will still see trading on weather and crop developments until the middle of March," said commodity adviser and broker Alan Kluis, Wayzata, Minn. By the end of March, most trade attention will shift to U.S. planting conditions, said Kluis in a MGEX conference call with reporters.
As of now, domestic planting prospects are so good that prevented planting acreage could fall from about 10 million last year to less than the historical average 4 million acres, said Kluis. Wheat planting prospects are excellent in the Dakotas, so wheat area could jump by 5 million acres from last year. Growers likely will plant at least 94 million acres of corn.
"With the crop getting smaller in South America and likely reduction in U.S. soybean planted acreage, it sets up an exciting bean market later this year," said Kluis.
Global Soybean Stocks Down. Projected global ending stocks of soybeans are down to 60.28 million metric tons from 63.43 million last month and 68.9 million last year.
USDA analysts now project soybean production in Argentina at 48 million metric tons, down 2.5 million from last month, and output in Brazil at 72 million tons, down 2 million from January.
"Argentina's soybean crop is just down a token amount," reduced by only 1 million tons from last year, said Kluis. "I would think that's an optimistic forecast and likely to be closer to 45 million."
The projected crop for Brazil is down 3.5 million tons from last year, which Kluis said is probably close to trade expectations, but "likely to get smaller in future reports."
Domestic Supply-Demand Steady. USDA analysts made no changes in this year's supply and demand projections for U.S. soybeans. The carryover of 275 million bushels is about 6 million bushels more than the average trade estimate ahead of the report.
"I think that is a little large based on the current export pace, but it's a reasonable number," said Kluis.
On the demand side of the domestic balance sheet, USDA projects crush at 1.615 billion bushels, down from 1.648 billion last year and 1.752 billion two years ago. Exports projected at 1.275 billion bushels are down from about 1.5 billion bushels in each of the past two years.