U.S. Soybean Supply To Grow 3 Percent

WASHINGTON-(USDA)--With an increase in soybean area, U.S. soybean production is forecast to climb 20 percent in 2008 to 84.5 million tons. However, a sharply-lower carry-over from 2007/08 will significantly reduce the impact that the larger crop will have on the overall U.S. supply situation.

The result is only a 3-percent increase in soybean supply of 2.5 million tons. Growing domestic demand for soybeans and products and the pressing need to rebuild depleted stocks will make it difficult to maintain current export volume into the coming year.

Consequently, soybean export volume is expected to fall 1.1 million tons to 28.6 million tons in 2008/09. Given a continuation of the tight supply situation in 2008/09, there is little expectation that soybean prices will decline significantly in the coming year. In fact, with carry-over down to 4.0 million tons, there is little cushion against a US production shortfall or foreign supply shocks that could push prices higher.