USDA left unchanged the forecast of soybean crop in Brazil, which increased pressure on the quotes

In the April WASDE supply and demand balance, the USDA experts almost did not change the global soybean balance, which surprised the market, which expected a significant decrease in the crop forecast for Brazil and adjustments to the estimates of global production and stocks.

Compared to the March estimates, the new soybean balance for 2023/24 MY has undergone the following changes:

• Estimates of beginning stocks decreased by 0.84 to 101.31 (93.09) mln tonnes due to the adjustment of the balance for 2022/23 MY.
• The global production forecast was lowered by 0.12 to 396.73 (378.2) million tons, in particular for South Africa, while the estimate for Paraguay was increased by 0.2 to 10.5 million tons. For Brazil, the harvest forecast was left at 155 (162) mln tonnes, while analysts estimated it at 151.7 mln tonnes, and Conab lowered its forecast from 146.85 to 146.52 mln tonnes. For Argentina, the forecast was left at 50 million tons, while analysts had expected it to rise to 50.5 million tons.
• The estimate of world consumption was reduced by 0.82 to 381.08 (365.76) million tons.
• The forecast for world exports was lowered by 0.55 to 173.06 (172.09) million tons, in particular for the United States – by 0.5 to 46.3 (54.2) million tons. For Brazil, the forecast was left at 103 (95.51) million tons, although Conab estimates exports at 92.2 million tons.
• The forecast for world imports was lowered by 0.45 to 170.33 (167.87) million tons amid reduced supplies to Indonesia, Algeria, the United States and Russia, while the EU will increase purchases.

• The estimate of world ending stocks was left at 114.22 (101.31, 99.7 and 100.3) million tons, while analysts estimated them at 113.7 million tons.

According to the report, the may futures for soybeans on the Chicago stock exchange yesterday fell by 0.5% to 426 $/t (-2.9% compared to the data after the release of the report in March), while November futures for the new crop are trading at a low level of 427,8 $/t on expectations of increased yield in the United States.

At the same time, USDA experts raised the forecast of world rapeseed production in 2023/24 MY by 0.3 to 88.4 (88.82) million tons, in particular for Australia by 0.2 million tons, and the forecast of world rapeseed exports by 0.2 to 17.13 million tons, in particular for Australia – by 0.2 to 4.6 million tons, Moldova – by 0.2 to 0.3 million tons, Canada – by 0.3 to 7.3 million tons.

Against this background, the May canola futures fell by 2.4% to 624.2 CAD/t or $455/t, which will increase the prospects for Canadian canola supplies to the EU market and increase pressure on rapeseed prices in Europe.

Tags: soybean, USDA Report