New USDA numbers weigh soybean on Chicago

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Porto Alegre, January 16, 2024 – The January report from the United States Department of Agriculture (USDA), released last Friday (12), focused the market’s attention and quite impacted CBOT contracts. Despite confirming the market sentiment that pointed to a cut in the Brazilian output due to weather problems, USDA indicated a better-than-expected Brazilian crop. Furthermore, USDA raised its projection for the Argentine crop, which has seen good crop development so far. Completing the negative picture for Chicago, USDA surprised by raising its projections for US production and stocks in 2023/24. All of this had a very negative impact on Chicago, mainly due to a likely greater South American crop this season.

USDA projected the US soybean production at 4.165 bln bushels in 2023/24, equivalent to 113.35 mln tons. Yield was indicated at 50.6 bushels per acre. In the previous report, the forecast was 4.129 bln or 112.37 mln tons. The market was betting on 4.123 bln bushels or 112.2 mln tons.

Ending stocks are projected at 280 mln bushels or 7.62 mln tons. The market was betting on a carryover of 239 mln bushels or 6.5 mln tons. In December, the forecast was 242 mln or 6.58 mln tons.

USDA repeated the crush estimate at 2.3 bln bushels (62.59 mln tons). Export estimates remained at 1.755 bln bushels (47.76 mln tons).

Regarding the global picture, USDA projected a global soybean crop in 2023/24 of 398.98 mln tons. In December, the forecast was 398.88 mln. Ending stocks were raised from 114.2 mln to 114.6 mln tons. The market was expecting 112.2 mln tons.

The USDA projection for the US crop was 113.3 mln tons, as already mentioned. The December number was 112.4 mln tons.

The Brazilian crop was projected at 157 mln tons, with a cut of 4 mln tons from the previous estimate. For Argentina, production is forecast at 50 mln tons, up 2 mln tons. The market was expecting 156.3 mln for Brazil and 48.9 mln for Argentina. China is expected to import 102 mln tons, repeating the December forecast.

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