USDA’s February report for soybeans is considered neutral to friendly with the projection for U.S. ending stocks slightly lower than the average estimate of at least one poll of trade analysts.
Crush was increased 10 million bushels reflecting both larger soybean meal exports and domestic use.
Ending stocks were dropped a corresponding 10 million bushels from last month to 125 million bushels and a 4.1 percent stocks to use ratio. The average trade estimate was 129 million bushels.
The season average price was raised 5 cents on the bottom side and 5 cents on the top side from last month and is projected to range from $13.55 to $15.05 a bushel.
Global stocks are projected to increase 24 million bushels to 2.209 billion bushels with a stock to use ratio of 22.9 percent.
The projected record South American crop is up 34.5 million bushels from last month with Brazilian production up and Argentine production unchanged.
May soybeans closed at $14.36 ¾, down 36 ½ cents per bushel. November soybeans closed at $12.82 a bushel, down 42 cents Feb.11.
There are still some uncertainties with South American production and when their crop will get into the international pipeline. Potential weather problems should keep a weather premium in the market.
Like corn, the soybean market could be a little oversold for this time of year and maybe due a rally.
I would be 10 percent priced on 2013 production, but watching closely. Over the past 31 years the average difference between the February projection for U.S. ending stocks and the final estimate has been 62 million bushels with 9 years below the final estimate and 22 years above.
The next USDA Supply & Demand report will be released March 8, 2013.