US soybean area is below planting intentions and market expectations

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Porto Alegre, July 2th, 2024 – The traditional report on planted area in the United States, always released at the end of June by the United States Department of Agriculture (USDA), focused the market’s attention last week and brought surprises. The market expected that, due to the favorable climate for planting since the beginning of sowing, still in April, the area planted with soybeans would be above that indicated by USDA in its March planting intention report. However, USDA surprised, bringing an area smaller than initially estimated.

According to USDA, the area planted with soybeans in the United States in 2024 is expected to total 86.1 mln acres (34.8 mln hectares). Despite being lower than the March number, the forecast indicates an increase of 3% over the previous year.

The number was below market expectations, which hit 86.86 mln acres (35.2 mln hectares). In the planting intention report, released in March, the area was 86.51 mln acres (35 mln hectares). Last year, US producers planted 83.6 mln acres (33.8 mln hectares) with the oilseed. According to USDA, 24 out of the 29 growing states are expected to increase or maintain planting.

The new area estimate naturally reduces the US production potential, which should now be estimated at around 120.5 mln tons (if the current productivity estimate is maintained). This adjustment should already come up in the USDA’s next monthly supply and demand report, which will be released on July 12. We highlight that even with a reduction, the US production potential could still point to the second-largest production in US history, a volume that could continue to prevent Chicago from gaining strength.

Regarding stocks, in a report parallel to the one on acreage, USDA indicated that quarterly soybean stocks in the United States, as of June 1, totaled 970 mln bushels (26.4 mln tons). The volume stored increased by 22% compared to the same period in 2023.

The number was above market expectations, of 957 mln bushels (26.05 mln tons). Out of the total, 466 mln bushels (12.68 mln tons) are stored with producers, an increase of 44% over the previous year. Off-farm stocks amount to 504 mln bushels (13.72 mln tons, an increase of 6%).

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