Prospects for continued wet weather in major U.S. growing regions and lower-than-expected ending stocks add up to bullish news for soybeans. According to USDA's May 9 World Agricultural Supply and Demand Estimates, U.S. soybean ending stocks for last year's crop continue to decline, coming in at a surprising 145 million bushels, compared to the average trade guess of 160 million bushels.

For 2008-09, U.S. soybean ending stocks of 185 million bushels were well below the trade estimate of 270 million bushels. The report is the first assessment of the U.S. and world supply and demand prospects for 2008-09.

U.S. soybean production for 2008-09 is projected at 3.1 billion bushels, up 520 million bushels from 2007-08. Biodiesel production is projected to use 15 percent of total soybean oil production for 2008-09 compared with 14 percent in 2007-08. Soybean exports are projected at 1.05 billion bushels, down 40 million bushels from 2007-08.

USDA pegged U.S. corn ending stocks at 763 million bushels, up from the average trade estimate of 685 million bushels, but still the lowest in over 10 years.

The 2008-09 U.S. corn crop is projected at 12.1 billion bushels, down 7 percent from the record 2007-08 crop. Average yield is projected at 153.9 bushels per acre, 1 bushel per acre below the 1990-2007 trend yield, based on the slower-than-average pace of planting.

Corn exports are projected down 16 percent as U.S. supplies face increased world competition with increased foreign production and a sharp drop in EU-27 imports. Ethanol use is projected at 4 billion bushels, up 33 percent from 2007-08. Global corn ending stocks for 2008-09, projected 99 million tons, would be a 25-year low.

U.S. rice production in 2008-09 is projected at 197 million hundredweight, nearly the same as 2007-08. Planted area is estimated at 2.77 million acres, up only 9,000 acres from 2007. Average rice yield is projected at 7,145 pounds per acre, down 40 pounds per acre from 2007, but the second highest on record. Imports for 2008-09 are projected at a record 22.5 million hundredweight, up nearly 5 percent from 2007-08.

Exports are projected at 98 million hundredweight, 14 percent below 2007-08. Tighter supplies and higher prices will constrain exports in the new marketing year, USDA says.

Rice ending stocks in 2008-09 are projected at 17.1 million hundredweight, 45 percent below 2007-08, and the lowest stocks since 1980-81. The season-average range for 2008-09 is projected at a record $18.50 to $19.50 per hundredweight, compared to $12.85 to $13.15 per hundredweight for 2007-08. Tighter domestic supplies along with expected high global prices will support prices during the year.

Global 2008-09 rice production is projected at a record 432 million tons, up 5 million tons from 2007-08. Global exports for 2008-09 are expected to be about the same as 2007-08 at about 27 million tons. Global ending stocks are expected to increase 5 percent from 2007-08 to 82 million tons, which would be the largest stocks since 2002-03.

New crop cotton production is projected at 14.5 million bales, down 25 percent from 2007-08. Domestic mill use was reduced 300,000 bales from 2007-08 to 4.3 million bales, but exports were raised slightly to 14.5 million bales. Ending stocks are projected at 5.6 million bales, a 43 percent reduction from the beginning level and 30 percent of total use. USDA estimates 2007-08 ending stocks at 9.9 million bales.

World production is forecast at 118 million bales, 2 percent below the current season. World consumption is projected at 127 million bales. USDA projects a smaller cotton crop for China at 35.5 million bales. World ending stocks are projected to fall nearly 10 percent to about 55.5 million bales.

Wheat ending stocks for 2007-08 at 239 million bushels was not far off trade estimates of 242 million bushels. Wheat ending stocks for 2008-09 of 483 million bushels was higher than expectations of 428 million bushels.

Wheat use was projected lower for 2008-09, with fewer exports offsetting lower domestic use. Domestic food use, projected at 960 million bushels is up 10 million bushels from 2007-08.