December U.S. soybean stocks climbed to a record high in 2018

Commodity “stocks” refer to the portion of a commodity that is not consumed domestically, exported, or otherwise used and is therefore kept in storage for later use. USDA’s latest Grain Stocks report indicates that U.S. soybean stocks were at an all-time high of 3.736 billion bushels in December 2018 as the first-quarter of the 2018/19 crop year (September–August) ended. Rising stocks are an indicator of excess supply and/or reduced demand. In this case, a large beginning supply and a 40-percent decline in first-quarter exports pushed December 1 soybean stocks well above the year-earlier inventory of 3.161 billion bushels. U.S. export shipments still lag far behind the pace of a year ago. The deficit is primarily related to the steep decline in trade with China, despite a few recent sales to state-owned companies there. Total U.S. soybean supply is forecast to reach a record-high 5 million bushels in 2018/19. Elevated stocks often foreshadow falling prices. In February, the forecast 2018/19 average soybean price received by farmers was narrowed to a range of $8.10–$9.10 per bushel, well below the 2017/18 average of $9.33 per bushel. This chart appears in the ERS Oil Crops Outlook newsletter, published in February 2019.

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