The intended increase of US soybean acreage keeps adding pressure on prices

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Porto Alegre, April 9, 2024 – The bearish fundamental scenario for global soybean prices received yet another negative impulse. On March 28, the United States Department of Agriculture (USDA) indicated an increase in the area destined for soybean cultivation in 2024. This news exceeded market expectations, resulting in losses in both Chicago and Brazil. According to the USDA planting intention report, the US soybean in 2024 should reach 86.5 mln acres, up 3% from the previous year, and exceed the market expectations of 86.3 mln acres. At the USDA Annual Forum in February, the forecast was even higher, with an area of 87.5 mln acres.

Last year, US farmers cultivated 83.6 mln acres of soybeans. According to USDA, 24 of the 29 producing states are expected to increase or maintain planting this year. Quarterly stocks of soybeans in the United States, through March 1, totaled 1.85 bln bushels, up 9% from the same period in 2023. This number exceeded the market expectations of 1.83 bln bushels. Out of the total stocks, 933 mln bushels are stored with producers, representing a 24% increase over the previous year.

Off-farm stocks total 912 mln bushels, down 3%. The commercialization of the 2023/24 soybean crop in Brazil involves 41.4% of the projected production, according to the SAFRAS & Mercado report, with data collected until April 5. In the previous report, with data from March 6, the number was 36.6%. In the same period last year, trading involved 44.3% and the five-year average for the period is 58.1%. Taking into account a crop estimated at 148.6 mln tons, the total soybeans already traded is 61.571 mln tons.

For the 2024/25 crop, taking into account a hypothetical minimum output of 148.6 mln tons, SAFRAS projects sales in advance of 3.1%, against 4.2% in the same period last year and the average of 12.4% for the period.

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