27.11.2019 (S&P Global) - NewDelhi — The US agricultural trade surplus in for the 2020 fiscal year that starts in October and ends September 2020 is projected at $7 billion, up 52% year on year, because of increased export value of soybeans, pork and dairy products, according to the USDA.

The USDA expects agricultural exports to outpace import growth in 2020 despite the trade dispute with China, the agency said Tuesday.

Total US agricultural exports in 2020 are projected at $139 billion, $2 billion above the August forecast, driven by higher soybean, pork and dairy export forecasts, the USDA said in its economic research service and foreign agricultural service situation and outlook report released Monday.

US soybean exports in 2020 are projected at $18 billion, up 7% year on year as a result of higher unit values, the report said.

US-origin soybean production estimates in 2019 declined 25% year on year to 96.62 million mt because of heavy flooding in the prime soy-producing Midwestern region during the planting season early this year. As a result, the unit price of US-origin beans rose sharply year on year.

According to S&P Global Platts price assessments, the monthly average loading price of SOYBEX FOB New Orleans was assessed at $344.08/mt, up 4.5% year on year.

Optimism on China

Despite the ongoing US-China trade tension, the USDA remains optimistic about agricultural exports forecast to the Asian giant, which is the world's biggest soybean purchaser.

Agricultural exports to China are forecast at $11.0 billion, an increase of $3.5 billion from August estimates, on higher expected soybean and pork sales, the USDA said.

Other major buyers of US soybeans are the EU, Mexico, Indonesia, Egypt, Japan, Taiwan, Argentina, Thailand, and South Korea.

Market challenges persist

US soybean meal export volumes in 2020 are forecast lower amid strong competition from Argentine exports, the USDA said. In addition, tight US soybean oil stocks are expected to increase prices, limiting the country's competitiveness.

US agricultural exports to the EU in 2020 are forecast at $13.3 billion, which is $300 million lower than the August projection because of reduced demand for soybean and soybean products, the agency said.

The EU is the world's second-largest soybean buyer after China. Total EU soybean imports in the 2018-19 marketing year (starting July 1) were 14.93 million mt, with the US and Brazil the top two suppliers.

According to the USDA's world agricultural supply and demand estimates, in the marketing year 2019-20 (September-August), the country is projected to export 48.31 million mt of soybean, up 1.5% year on year.