Porto Alegre, June 14, 2022 – The June report from the United States Department of Agriculture (USDA), released last Friday (10), did not promise great news but brought some surprises. To a certain extent, in line with the bias expected by the market, the news was only limited to the high projections for the South American crop in the 2021/22 season.
USDA kept the US soybean crop at 4.640 bln bushels in 2022/23, equivalent to 126.28 mln tons. Yield was maintained at 51.5 bushels per acre. The market was betting on 4.638 bln bushels or 126.23 mln tons. Ending stocks are projected at 280 mln bushels or 7.62 mln tons. The market was betting on carryover stocks of 295 mln or 8.03 mln tons. USDA also kept the crush at 2.255 bln bushels and exports at 2.2 bln. For the 2021/22 season, the US stockpiles were indicated at 205 mln or 5.58 mln tons. The market was betting on 217 bln or 5.91 mln.
In general terms, USDA maintained the ideas for the 22/23 season, changing ending stocks due to the negative adjustment in stocks at the end of the 21/22 season. The accelerated flow of US sales, due to the aggressiveness of China, justifies the decline in stocks at the end of 21/22, which consequently negatively affects supply in the 22/23 season (beginning stocks + production) and explains the projections of stocks below 8 mln tons at the end of the 22/23 business cycle. Although the scenario points to a larger supply, the picture is not so loose. The stock-to-use ratio in the United States is expected to stay below 12%.
Regarding the world picture, USDA projected a global soybean crop in 2022/23 of 395.37 mln tons, estimating exports of 170.3 mln tons and, with that, raising ending stocks to 100.5 mln tons, up 16.7% from the end of the previous season. Stocks were above the market expectations of 99.8 mln tons. The number reinforces the idea of greater slack in supply and recovery of reserves. The stock-to-use ratio is back to 26.6% and projects a little more tranquility for next season’s supply.
For the 2021/22 season, ending stocks stood at 86.15 mln, also above the market carryover projections of 85 mln tons. Brazil’s production in the 2022/23 season was maintained at 149 mln tons, and Argentina’s at 51 mln tons. The estimate for the Brazilian crop in the 2021/22 season rose from 125 to 126 mln tons, while the forecast for Argentina increased from 42 to 43.4 mln tons. The market was expecting 124.8 mln tons for Brazilian production, while for Argentine production the expected figure was 42.2 mln tons.
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