The latest World Agricultural Supply and Demand Estimates report pegs the year’s soybean crop at 3.205-billion bushels. That’s an increase of 149-million bushels from 2011 – but isn’t expected to keep up with export demand. Exports are projected to increase by 190-million bushels – with the crush use of soybeans increasing by 10-million bushels. According to American Farm Bureau Federation Senior Economist Todd Davis – that likely means ending stocks of soybeans will fall to just 145-million bushels – a 4.4-percent stocks-to-use ratio – or a mere 16 days of inventory at the end of the year. Davis says that will tend to be a bullish factor and should keep soybeans positioned as the market driver. The U.S. season-average price for the 2012-13 marketing year is forecast at 13-dollars per bushel. That would eclipse the 2012 record of $12.35.

According to Davis – there are several factors leading to this perfect storm for soybeans. South American soybean production is on the decline – with the latest report reducing Argentina’s production 91.8-million bushels and Brazil’s production 36.7-million bushels from April. Globally – ending stocks for soybeans will be the tightest they’ve been since the 2007-08 marketing year at 53.24-million metric tons – a stocks-to-use ratio of 15.5-percent.