USDA most recently forecast 2017/18 season-ending soybean stocks +25 million bushels higher to 555 million. This month’s expected increase is the consequence of a lowered 2017/18 export forecast, which was lowered -35 million bushels to 2.065 billion. February export inspections of soybeans declined -50 million bushels from January to 155 million. While this is typical for this season, cumulative shipments through February fell even further behind the 2016/17 pace. Logistical delays for a top U.S. transportation artery contributed to slower soybean exports in February. Barge shipments to port elevators at the Gulf of Mexico (the point of departure for nearly 60% of U.S. soybean exports) have been interrupted by upstream flooding. Barge traffic was temporarily suspended on lower sections of the Mississippi River and its major tributaries including the Ohio, Illinois, Tennessee, and Arkansas Rivers. Runoff from last month’s heavy rains and rapidly melting snow was responsible. Rising waters make it more difficult to get tow boats under the loading spouts at river terminals. A faster current also forces reductions in the size of barge tows and restricts operations to daylight hours. Even with no further rainfall, it could take weeks for normal barge service to resume. Some of the barge traffic can be replaced by additional rail shipments to Pacific Northwest ports. Understand, it would take the highest ever March – August soybean shipments to realize even this down-sized forecast of annual exports. However, we are not going to be totally negative here — export sales may revive in the second half of 2017/18 despite record competitor supplies being currently harvested in Brazil. Both the current and deferred price bids at the U.S. Gulf are still quite competitive with South American origins, which could stimulate additional sales. Buying interest could also heat up again this summer with the possibility of sluggish soybean shipments from Argentina. (Source: USDA, ERS, Oil Crops Outlook)

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