U.S. soybean inventories before this year’s harvest will be less than forecast a month ago as export demand increased after drought cut production in South America, the government said.
Reserves on Aug. 31 will total 175 million bushels (4.77 million metric tons), down from 210 million projected a month ago, the U.S. Department of Agriculture said today in a report. The average estimate of 33 analysts surveyed by Bloomberg News was 192 million bushels. Inventories before the 2013 harvest will fall to 140 million bushels from 145 million estimated a month ago, the USDA said.
“Soybean supplies are going to be extremely tight before the harvest,” Jerry Gidel, the feed-grain analyst for Rice Dairy LLC in Chicago, said before the report. “The U.S. crop will need more rain the next two months to ease concerns about declining supplies.”
Soybean futures for November delivery fell 0.1 percent to $13.3125 a bushel yesterday on the Chicago Board of Trade. The price has risen 10 percent this year on forecasts for reduced production in Brazil and Argentina, the two biggest producers after the U.S.
Smaller soybean inventories may increase feed costs for meat producers including Tyson Foods Inc. and Smithfield Foods Inc. Craig Huss, the chief risk officer at Decatur, Illinois- based Archer Daniels Midland Co., the world’s largest grain processor, said May 1 that reduced South American exports would make it “difficult to buy beans going forward.”
World soybean inventories on Oct. 1 will fall to 53.36 million tons from 70.10 million a year earlier, the USDA said. Rising prices may boost global production and raise inventories to 58.54 million tons next year, from 58.07 million estimated a month ago, the department said.
Soybeans are the second-biggest U.S. crop, valued last year at $35.8 billion, government figures show.
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