The USDA left its forecast for Brazil's soybean crop unchanged, adding to pressure on quotes

In April's WASDE supply and demand balance sheet, USDA experts left little to no change in the global soybean balance, surprising the market, which had expected a sharp cut in Brazil's crop forecast and revisions to global production and inventory estimates.

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

• The estimate of initial reserves was reduced by 0.84 to 101.31 (93.09) million tons as a result of the balance adjustment for 2022/23 MY.
• The global production forecast was reduced by 0.12 to 396.73 (378.2) million tons, in particular for the countries of 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 the level 155 (162) million tons, while analysts estimated it at 151.7 million tons, and the agency Conab lowered its forecast from 146.85 to 146.52 million tons. For Argentina, the forecast was left at the level of 50 million tons, while analysts expected its increase to 50.5 million tons.
• The estimate of world consumption was reduced by 0.82 to 381.08 (365.76) million tons.
• The forecast of world exports was reduced by 0.55 to 173.06 (172.09) million tons, in particular for the USA – by 0.5 to 46.3 (54.2) million tons. For Brazil, the forecast was left at the level of 103 (95, 51) million tons, although the Conab agency estimates exports at 92.2 million tons.
• The forecast of world imports was reduced by 0.45 to 170.33 (167.87) million tons against the background of reduced supplies to Indonesia, Algeria, the USA and the Russian Federation, while the EU will increase purchases.
• The estimate of global 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.

On the report, May soybean futures on the Chicago Stock Exchange fell 0.5% to $426/t yesterday (-2.9% compared to the data after the release of the report in March), while November futures for the new harvest traded at a low of $427.8/t on expectations of an increased US harvest.

At the same time, USDA experts increased the forecast of world rapeseed production in 2023/24 MR by 0.3 to 88.4 (88.82) million tons, in particular for Australia by 0.2 million tons, as well as 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, May canola futures fell 2.4% to CAD 624.2/t or $455/t, which will increase the prospects for Canadian canola supplies to the EU market and increase pressure on canola prices in Europe.