Domestic soybean stockpiles will likely grow this year, analysts say, reflecting lackluster exports.
The U.S. Department of Agriculture is expected to raise its oilseed stocks forecast for 2017-18 to 445 million bushels in a monthly report due next week, according to average analyst estimates compiled by The Wall Street Journal. That would be up 5% from the agency's previous projection of 425 million bushels, and almost 50% above last season's 301 million figure.
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The growing surplus is a result of weak soybean exports this year, which analysts say have fallen behind the pace needed to meet the USDA's projections. Bumper crops in Brazil and Argentina last harvest have allowed them to continue exporting cheap oilseed through the year, including during the period when U.S. merchants would usually have an advantage.
"For soybeans to reach the USDA's export forecast," said Dave Marshall, a farm-marketing adviser at First Choice Commodities, "we will have to sell more soybeans than any time in history."
Mr. Marshall says such a feat is unlikely without weather problems in South America. Excessively dry weather in Argentina currently has traders' attention as a potential problem, but market observers say it is still too early in the growing season to expect any significant issues.
Exports of grain have also disappointed some analysts. The USDA is also due to raise its 2017-18 U.S. wheat stocks forecast to 941 million bushels from 935 million the previous month.
They expect the agency to trim its most recent U.S. corn stockpiles forecast to 2.477 billion bushels from 2.487 billion in November.
Write to Benjamin Parkin at email@example.com
(END) Dow Jones Newswires
December 08, 2017 17:56 ET (22:56 GMT)