May 10 (Bloomberg) -- U.S. soybean inventories may more than double before the next year’s harvest as production rebounds from three consecutive years of drought, the government said.
Reserves on Aug. 31, 2014, will total 265 million bushels (7.22 million metric tons), up from this year’s projection of 125 million, the smallest since 2004, the U.S. Department of Agriculture said today in a report. The average estimate of 31 analysts surveyed by Bloomberg was 239 million bushels. The USDA said in February that reserves may total 250 million bushels.
“The USDA is predicting a move from historically tight supplies to adequate, or potentially surplus supplies next year,” Anne Frick, a senior oilseed analyst for Jefferies Bache LLC in New York, said before the report. “Weather will now be the focus to see if the U.S. can produce a big recovery in production.”
Tight supplies of soybeans this year have raised feed costs for meat producers including Tyson Foods Inc. and Smithfield Foods Inc. The U.S. may need to import the commodity and animal feed made from the oilseed from Brazil and Argentina to bridge the gap until U.S. farmers begin harvesting in September, Frick said.
Soybean futures for July delivery rose 1.3 percent to close at $14.0875 a bushel yesterday on the Chicago Board of Trade, capping a three-day gain of 2.9 percent. Still, the price has dropped 21 percent since reaching a record $17.89 in September on forecasts for record production in Brazil and Argentina, the biggest producers after the U.S.
This year’s U.S. soybean crop is projected at a record 3.39 billion bushels, down from 3.405 billion forecast in February and up from 3.015 billion harvested a year earlier. Yields may rise to 44.5 bushels an acre from an estimated 39.6 bushels last year, the USDA said.
Global inventories before the start of the 2014 northern hemisphere harvest will be 74.96 million tons, up from 62.46 million estimated this year. Analysts surveyed by Bloomberg expected 67.9 million tons, on average.
Soybeans are the second-biggest U.S. crop, valued last year at $43.2 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth in Chicago at email@example.com.