China's continued strong buying of soybeans will prompt Washington later on Thursday to cut its estimate of US stocks by up to 38%, in a report heralded as "potentially very bullish or bearish".
US exports may be poised to beat the 2008-09 record of 1.28bn bushels by an even bigger margin than had been thought thanks to the cracking pace of shipments since the marketing year started in September.
Led by China, exports had reached 12.7m tonnes by November 26, one-third higher than a year before, with shipments in the pipeline near-doubling to 15.1m tonnes.
The acceleration could leave US stocks as low as 170m bushels when the 2009-10 season ends next August, 100m bushels lower than Washington's current estimate, analysts at Global Commodity Analytics believe.
Underestimated demand?
However, the consensus is for the US Department of Agriculture, in its monthly world crop supply and demand report, to trim its stocks estimate to only 233m bushels.
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Consensus forecasts for Thursday's report (current USDA figure)
Corn stocks: 1.65bn bushels (1.625bn bushels)
Soybean stocks: 233m bushels (270m bushels)
Wheat stocks: 887m bushels (885m bushels)
Figures for US only, year end 2009-10 |
"The low range guesses are not coming from thinking that the US Department of Agriculture has underestimated demand, particularly from China, and now is the time to address it," Tim Hannagan at broker PFG Best, said.
"Demand certainly has been better than the USDA estimates suggest."
High estimates reflected a more pragmatic view, given that the USDA only last month raised its estimate of year-end stocks by 40m bushels.
"Some believe [USDA statisticians] are unlikely to wipe it all out and then some, with a potentially slower export season ahead if South American crops look to steal a share of our export market," Mr Hannagan said
"There are arguments for all to justify and that is what makes the report potentially very bullish or bearish."
Weak exports
For corn, analysts are on average factoring in a 25m-bushel increase, to 1.65bn bushels, in year-end stocks thanks to a weak pace of exports.
Some believe the figure could go as high as 1.73bn bushels after factoring in a distortion from America's backward harvest too.
Delays have been particularly acute in some poorer-yielding eastern areas of the cornbelt, which might skew production estimates upwards, some analysts believe.
Slow exports are expected to see Washington edge its estimate wheat stocks at the end of 2009-10 higher to 887m bushels.
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