USDA indicates record US soybean production and sharply higher stocks

 The August report from the United States Department of Agriculture (USDA), released last Monday (12), focused the market’s attention and had a major negative impact on futures contracts in Chicago. Although the market was already expecting increases in estimates for the US area, yield, production and stocks in the 2024/25 season, the new numbers were well above expectations, resulting in an extremely bearish report for the market. The new estimates now point to the highest average yield and the largest production in US history, which results in a strong increase in final stocks, which are now indicated at the highest levels since the 2018/19 crop.

USDA indicated that the US soybean crop should reach 4.589 bln bushels in 2024/25, equivalent to 124.9 mln tons. Yield was indicated at 53.2 bushels per acre. The number exceeded the market expectation of 4.469 bln or 121.6 mln tons. In July, the estimate was 4.435 bln bushels or 120.7 mln tons. Yield was estimated at 52 bushels per acre. The estimate for the area to be reaped was lifted from 85.3 mln to 86.3 mln acres.

Final stocks are projected at 560 mln bushels or 15.24 mln tons. The market was betting on a carryover of 472 mln bushels or 12.85 mln tons. In June, stocks were estimated at 435 mln bushels or 11.84 mln tons.

USDA is estimating exports of 1.850 bln bushels (50.35 mln tons) and crushing of 2.425 bln bushels (65.99 mln tons), against 1.825 bln bushels (49.67 mln tons) and 2.425 bln bushels (65.99 mln tons) respectively.

For 2023/24, the Department indicated carryover stocks of 345 mln bushels (9.39 mln tons), unchanged from the previous report. The market was expecting stocks of 347 mln bushels (9.44 mln tons).

Regarding the global scenario, USDA projected a global soybean crop in 2024/25 of 428.73 mln tons. In July, the number was 421.85 mln. For 2023/24, the forecast is 395.12 mln tons.

Ending stocks for 2024/25 are estimated at 134.3 mln tons, above the market forecast of 127.6 mln tons. Last month, the forecast was 127.76 mln tons. Stocks for the 2023/24 season are estimated at 112.36 mln tons. The market was expecting 110.9 mln tons.

For Brazilian production, USDA maintained estimates at 153 mln tons for 2023/24 and 169 mln for 2024/25. For Argentina, the forecast for 2023/24 was cut from 49.5 to 49 mln tons. For 2024/25, the initial estimate is 51 mln tons, unchanged from the previous month.

Chinese imports in 2023/24 were increased from 108 to 111.5 mln tons. For next season, the forecast is 109 mln tons, repeating the previous month.

Tags: crop, yield, stocks, Argentina, estimates, China, area, USDA, Brazil, soybeans, US, Production