Friday’s WASDE report showed that USDA is expecting higher soybean ending stocks for this season, although it isn’t sure yet which use category will be the source. Crush for 2019/20 was raised 15 million bushels from the June estimate, to 2.155 billion bushels, while exports were left unchanged at 1.650 billion as USDA waits to see how late-season demand from China may play out.
Ahead of the report, analysts on average had expected 2019/20 ending stocks to change little from the June estimate of 585 million bushels, but USDA’s take on the June soybean stocks figure of 1.39 billion bushels is that projected demand is a bit overstated and consequently raised ending stocks to 620 million, up 35 million from June.
To get to higher stocks without lowering crush or exports meant USDA had to adjust the Residual category, the miscellaneous bucket for food use and offsets for weight discrepancies. The July WASDE report put residual use a -46, meaning 46 million bushels of soybeans are expected to be added to available supply. USDA makes this move from time to time during the latter part of a season and then rebalances use categories in September, when export and crush volumes are known.