U.S. soybean inventories may more than double before the next season’s harvest as production rebounds from three consecutive years of drought, the government said.
Reserves on Aug. 31, 2014, will total 265 million bushels, up from this year’s projection of 125 million, the U.S. Department of Agriculture said today in a report. The average estimate of 30 analysts surveyed by Bloomberg was 268 million bushels. U.S. production was forecast at 3.39 billion, up from 3.015 billion harvested last year and above the 3.371 billion expected on average in a Bloomberg survey.
Increased supplies later this year may reduce feed costs for meat producers including Tyson Foods Inc. (TSN:US) and Smithfield Foods Inc. (SFD:US) Soybean futures are down 26 percent since reaching a record $17.89 in September on forecasts for record combined output in Brazil, the world’s top shipper of the oilseed, and Argentina, the leading exporter of soy-based animal feed and cooking oil.
“We are shifting to at least an adequate soybean supply, and the potential for surplus inventories with normal growing weather this year,” Ken Smithmier, a grain analyst for researcher The Hightower Report in Chicago, said before the USDA data. “This is a significant jump.”
Soybean planting was 71 percent completed on June 9, down from 84 percent on average from 2008 to 2012 and the slowest since 1996, the USDA said this week. Farmers will plant 77.1 million acres, unchanged from 77.1 million forecast in May and down from 77.2 million a year earlier, the agency said today. Yields were forecast at 44.5 bushels an acre, unchanged from last month and up from 39.6 bushels a year earlier.
Global inventories before the start of the 2014 Northern Hemisphere harvest will be 73.69 million tons, down from 74.96 million estimated last month and up from 61.21 million this year. Analysts surveyed by Bloomberg expected 74.04 million tons, on average.
Soybeans are the biggest U.S. crop after corn, valued last year at $43.2 billion, government figures show.
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