Soybeans: USDA Supply and Demand Report

Porto Alegre - RS - Brazil - 20231109

Soybeans: USDA Supply and Demand Report

Source: USDA and Rio Grande Agricola database.

In its new supply and demand report, the USDA adjusts soybean production and productivity for the 2023/2024 harvest. The slight improvement in production and productivity data made it possible to maintain the export and crushing program for American oilseeds.

The new indicators of American production put pressure on the Chicago stock exchange, bringing down future maturities, with a drop of more than 20 points in November, January and March maturities and, in other maturities, a smaller drop ranging between 10 and 20 points.

Despite being consolidated, American production did not bring major variations in the latest reports and the fundamentals are focused on the climate in South America, bringing consistency for better production in the south of Brazil and Argentina, but greater concerns in the north and mid-west region , where there is talk of replanting soybeans due to the adversities of the climate, sometimes too hot, sometimes heavy rains, as in the case of the State of Paraná, where recent rains hit the crops hard, harming the development of the plantation, where many areas will need to be replanted, resulting in a significant increase in production costs.

Despite the adverse weather conditions in Brazil, the USDA maintained the optimistic number of a new record for soybean production, with the possibility of reaching 163 million tons, but some analysts already doubt this number, considering it unrealistic, especially due to the inconsistencies of the climate during the planting window in producing states.

Corn: USDA brings production and productivity of corn in the 2023/2024 harvest below expectations.

Porto Alegre - RS - Brazil 20231012

Corn: USDA Supply and Demand Report

Source: USDA and Rio Grande Agricola database.

Once again, the United States Department of Agriculture (USDA) surprised and brought the United States corn production figures below what the market expected.

The 2023/2024 corn harvest in the United States is practically consolidated and the report from the United States Department of Agriculture (USDA) brings lower-than-expected numbers for the production and productivity of the American cereal, compared to previous reports released by the department, bringing the data closer to reality and, contrary to those overestimated and initially predicted, in mid-March.

The 2023/2024 North American corn harvest was adjusted to 382.65 million tons, around 0.46% below that of September, which was estimated at 384.42 million tons. Productivity fell to 180.97 bags per hectare, compared to the 181.81 bags per hectare published in the last September report.

Final stocks of American corn were 53.62 million tons, around 4.96% below the last comparison, which was estimated at 56.42 million tons in September. Exports were also estimated to fall, remaining at 51.44 million tons, corresponding to 1.21% below the forecast in September, which was estimated at 52.07 million tons.

For the other data, with the exception of Argentina, there were no significant changes in world corn production data, according to a report released by the USDA in October. Argentina, on the other hand, had an increase in the harvest forecast by another 1 million tons in corn production for 2023/2024, therefore estimating total corn production in Argentina at 55 million tons.

Soybean: USDA report surprises with soybean production and productivity below expectations.

Porto Alegre - RS - Brazil - 20231012

Soybean: USDA Supply and Demand Report

Source: USDA and Rio Grande Agricola database

Once again, the United States Department of Agriculture (USDA) surprised the market, bringing American soybean production numbers below expectations. Now that the 2023/2024 American harvest is practically consolidated, the department's report brings numbers below expectations, compared to previous reports released by the department, however, within a more realistic situation for soybean production in the United States, contrary to those forecasts initial estimates that overestimated American production and productivity, in mid-March of the current year.

In our previous comments we had already highlighted that, step by step, the USDA would bring its numbers into reality, given that the United States suffered severe impacts from the climatic adversities that hit the soybean-producing region in the country.

Soybean production in the United States for the 2023/24 harvest was reduced to 111.70 million tons, compared to the 112.84 million tons announced in September and, compared to the 2022/2023 harvest, which was 116.22 million of tons, was 3.89% lower. Soybean productivity for the 2023/2024 harvest, in relation to what was estimated in September, was 55.59 bags per hectare, against 56.15 bags per hectare in the last report.

The other USDA indicators have not changed much, with the exception of Brazilian exports which are now 97.50 million tons and, also, the department predicts a 3.04% reduction in world stocks, reaching 115.62 million tons. . Furthermore, there was a reduction in the global production estimate to 399.50 million tons, approximately 1.83 million tons below the September estimates.

Another number that was overestimated was Brazilian soybean production, which is forecast at 163 million tons, but we are still in the middle of planting the 2023/2024 harvest and, at this moment, Brazil is suffering from adverse weather conditions, caused by the phenomenon " el niño", which prevents the advancement of soybean planting, remaining, in some important regions, below the previous year's levels, for example: Mato Grosso: 2022/2023 soybean harvest, at the same time, planting was at 41, 35% against 35.09% for the 2023/2024 soybean harvest.