The small South American soybean crop of 2012 will result in
much smaller inventories of that crop by the end of the year. However, that
draw down in stocks in combination with the much larger harvest expected in 2013
suggests that the pace of consumption of South American soybeans will not have
to slow. In contrast, the small U.S. harvest this year will require a
substantial reduction in consumption over the next year.
The magnitude of the year-over-year reduction in consumption
of U.S. soybeans that will be required is not yet known. The new production
forecast to be released on September 12 and the estimate of September 1stocks of
old crop soybeans to be released on September 28 will provide for a better
estimate of the needed decline. Based on the USDA’s August forecasts, a
reduction of 400 million bushels (12.7 percent) will be required. The pace of
consumption, as revealed in weekly export reports and monthly reports of
domestic crush, will be monitored to verify that the pace of consumption is
slowing. <Read More>
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