USDA lowered its forecast for global oilseed production, especially the US soybean crop, which supported quotes

In the January supply and demand report, USDA experts lowered the forecast for global oilseed production in 2024/25 MY by 3 million tons to 680.35 million tons (657 million tons in 2023/24 MY), in particular soybeans - by 2.88 million tons, rapeseed - by 1 million tons, which is offset by an increase in cotton production by 0.7 million tons and sunflower by 0.18 million tons.

Compared to December estimates, the new world soybean balance for the 2024/25 MY has undergone the following changes:

• The estimate of initial reserves was increased by 0.22 to 112.38 million tons (101.24 million tons in 2023/24 MY).
• The forecast for world production has been reduced by 2.88 to 424.26 million tons (394.97 million tons in 2023/24 MY and 378.4 million tons in 2022/23 MY), in particular for the USA - by 2.58 to 118.84 (113.27) million tons, as USDA experts sharply reduced the estimate of the average soybean yield in the USA from 3.47 to 3.407 t/ha (with analysts' estimates at 3.467 t/ha) and the forecast for harvested areas - by 250 thousand acres to 86.05 million acres. For Brazil and Argentina, the harvest forecasts have been left at 169 and 52 million tons, respectively, against the backdrop of mostly favorable weather conditions for sowing.
• The estimate of world consumption was increased by 1.89 to 405.53 (384.3) million tons, in particular for Brazil - by 1 to 59.1 (58.6) million tons.
• The forecast for world exports was left unchanged at 181.97 (177.62) million tons.
• The estimate of world ending stocks has been reduced by 3.5 to 128.37 million tons, which will be 14.2% higher than the previous season's figure (112.38 million tons).

Based on the report, January soybean futures in Chicago rose by 2.1% to $372.4/t (+1.9% compared to the data after the December report). Additionally, the quotation was supported by a decrease in soybean stocks in the US (as of December 1) to 84.3 million tons, which is 3 million tons lower than analysts' estimates and only 2.7 million tons higher than last year.

The forecast for global rapeseed production in the 2024/25 MY has been reduced by 1.01 to 85.17 (89.69) million tons, in particular for India - by 0.5 to 11.6 (11.2) million tons, and for the Russian Federation - by 0.5 million tons, but for Canada the estimate was left at 18.8 million tons, although the official forecast of Statistics Canada is 17.8 million tons.

The forecast for rapeseed exports was increased for Canada by 0.5 to 7.25 million tons, but reduced for Ukraine by 0.2 to 3.17 million tons and Australia by 0.2 to 4.55 million tons.

The EU and China rapeseed import forecasts were left at 6.85 (5.45) and 3 (5.5) million tonnes respectively. The estimate of world rapeseed ending stocks was increased by 0.45 to 7.64 (10.86) million tonnes due to a reduction in domestic consumption of 0.68 million tonnes and an increase in opening stocks of 0.75 million tonnes after the recalculation of the 2023/24 MY balance.

According to the report, February rapeseed futures on the Paris MATIF rose by 1.7% to €542.5/t or $556/t (+1.1% per month), and March canola futures on the Winnipeg exchange rose by 2.5% to CAD641.6/t or $445/t (+3.2% per month).

The forecast for world sunflower production in the 2024/25 MY has been increased by 0.18 to 50.69 (56.03) million tons, in particular for the Russian Federation - by 0.25 to 16.55 (17.1) million tons. For Argentina, the estimate was left unchanged at 4 (3.9) million tons. The forecast for world sunflower consumption has been increased by 0.19 to 51.5 (56.7) million tons, and the estimate of ending stocks - by 0.1 to 2.36 (3.3) million tons.

A sharp 6% increase in soybean oil quotes on Friday will continue to support sunflower and palm oil prices this week.