USDA forecast of tight supplies supports soybeans despite big crops

HAMBURG: US soybean futures rose again on Monday after a US Department of Agriculture (USDA) forecast that US soy supplies will remain tight into 2022 despite a record-large crop this year.

Corn and wheat were also firm.

Chicago Board of Trade most-active soybeans were up 0.04% at $13.77-3/4 a bushel at 1140 GMT, continuing firmness seen on Friday.

Wheat rose 0.2% to $6.57 a bushel. Corn rose 0.9% to $5.47-3/4 a bushel.

The USDA said US stockpiles of corn and soybeans are expected to increase only slightly by the end of the 2021/22 marketing year on Aug. 31, 2022, despite record-large US harvests of the crops planted this spring.

"Soybeans and corn remain supported by the USDA's forecast on Friday that US supplies will be tight in the coming year with strong demand expected to absorb forecast record US harvests," said Matt Ammermann, StoneX commodity risk manager.

"I think this expectation of tight supplies could continue to be a supportive factor until the market gets a more accurate picture of US crop yields around July."

"Corn has to compete with expensive soybeans to attract plantings by US farmers which is a supportive factor today."

China is also expected to return as a buyer following the end of the Lunar New Year holiday season, he said. But China is likely to focus its next purchases on new crop supplies of soybeans and corn from South America, he said.

Markets were closely watching progress with South American harvests.

"Wheat is receiving some support from cold weather in Black Sea export countries," Ammermann added. "Global wheat markets continue to focus on the need to replace Russian supplies following Russia's grain export taxes."