USDA cuts forecast for world soybean production and stocks by less than analysts expected, but stock prices rise sharply

In a March report, USDA experts cut forecasts for global soybean production, consumption and stocks, but by less than analysts had expected. However, a significant increase in the export forecast led to a rapid increase in quotations.

Thus, May soybean futures on the Chicago Stock Exchange rose by 1.5% to $438.5/t (-0.8% compared to the data after the February report).

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

• The estimate of initial reserves was reduced by 1.42 to 102.15 (98.03) million tons due to the adjustment of data for 2022/23 MR.
• The global production forecast was reduced by 1.36 to 396.85 (378.06) million tons, in particular for South Africa – by 0.4 to 2.1 million tons due to the deterioration of productivity, Brazil – by 1 to 155 (162) million tons (on the background of unfavorable weather in Sao Paulo and a low harvest in Paraná) compared to analysts' estimate of 152.3 million tons. For Argentina, the forecast was left at the level of 50 million tons, while the market expected it to increase to 50.2-51 million tons.
• The estimate of world consumption was reduced by 1.13 to 381.9 (365.9) million tons.
• The global export forecast was increased by 3.04 to 173.61 (171.96) million tons, in particular for Brazil – by 3 to 103 (95.51) million tons due to significant stocks and active deliveries at the beginning of the year.
• The forecast of world imports was increased by 2.93 to 170.78 (164.38) million tons, in particular for China – by 3 to 105 (104.5) million tons.
• The estimate of global ending stocks was reduced by 1.76 to 114.27 (102.15; 99.7 and 100.3) million tons (which is in line with analysts' forecasts), primarily for Brazil, which will be partially offset by their increase in China.

USDA experts increased the forecast of global rapeseed production in 2023/24 by 0.7 to 88.1 (88.82) million tons, in particular for Ukraine - by 0.1 to 4.4 million tons, Russia - by 0.1 to 4.2 million tons, India - by 0.5 to 12.5 million tons.