Soybean prices increased, despite the USDA increasing its forecasts of soybean production and stocks in 2024/25 MY

In the new soybean balance sheet for 2024/25 MY, published in the May WASDE supply and demand report, the forecasts of global soybean production, consumption, exports and stocks were sharply increased. However, it did not lead to the price decline, as traders took into account the increase in wheat prices and the decrease in soybean stocks forecast in 2023/24 MY by 2.44 mln tonnes to 111.78 mln tonnes due to the increase in consumption forecast by 2.45 mln tonnes to 383.5 mln tonnes. At the same time, analysts estimated the stocks at 112.35 million tons.

The forecast of soybean harvest in 2023/24 MY for Brazil was lowered by 1 to 154 mln tonnes (162 mln tonnes in 2022/23 MY), and for Argentina – to 50 (25) mln tonnes, while analysts estimated them at 152.6 and 49.6 mln tonnes, respectively.

Compared to the balance for 2023/24 MY, the new soybean balance for 2024/25 MY has undergone the following changes:

• Estimated beginning stocks were increased to 111.78 mln tonnes (100.53 mln tonnes in 2023/24 MY) due to the adjustment of production in 2022/23 and 2023/24 MY.
• The forecast for global production was raised to 422.26 (396.95) million tons, in particular for the United States – to 121.1 (113.34) million tons, Argentina – to 51 (50) million tons, Brazil – to a record 169 (154) million tons amid an increase in sowing areas due to high profitability of cultivation.
• The estimate of world consumption was increased to 401.74 (383.53) million tons, in particular for the United States – by 3 to 69 million tons due to increased processing volumes, Argentina – by 4.85 to 47.6 million tons, Brazil – by 0.25 to 58.1 million tons.
• The forecast for world exports has been raised to 180.2 (172.47) million tons, in particular for the United States – to 49.7 (46.27) million tons, Brazil – to 105 (102) million tons, Argentina – to 5.5 (4.6) million tons, Ukraine – to 3.5 (3.1) million tons.
• The forecast for global imports has been raised to 176.4 (170.3) million tons, in particular for China – by 4 million tons to a record 109 million tons, as well as for Pakistan, Egypt, Mexico, Iran and Vietnam.
• The estimate of world ending stocks was raised to 128.5 (111.78, 99.7 and 100.3) million tons, although analysts had estimated them at 120.87 million tons. Estimates were raised for the United States, Brazil, Argentina, and China.

According to the report, the July soybean futures on the Chicago stock exchange rose by 0.9% to 447,9 $/t (+5.1% compared to the data after the release of the report in April), and November – by 0.4% to 443 $/t (+3.6%), which became cheaper than futures for the old crop.

World rapeseed production in 2024/25 MY is forecast at 88.34 mln tonnes (88.39 mln tonnes in 2023/24 MY), as the decline in the EU to 19 (20) mln tonnes, Ukraine to 3.7 (4.4) mln tonnes, India to 15.1 (15.5) mln tonnes will be offset by the increase in Canada to 19.6 (18.8) mln tonnes, China to 15.6 (15.4) mln tonnes and Australia to 6.5 (5.7) mln tonnes.

The USDA experts estimated the world trade of rapeseed in 2024/25 MY at 17.6 (16.7) mln tonnes, including the exports from Australia will increase by 0.8 to 5.4 mln tonnes, from Canada – by 0.3 to 6.9 mln tonnes, while the exports from Ukraine will decrease by 0.1 to 3.3 mln tonnes.

Tags: USDA Report, prices, soybean