Porto Alegre, January 21th, 2025 – The international soybean market started the week with good gains. Contracts reached their best level since early October, reacting positively to data released by the United States Department of Agriculture (USDA). However, the market lost strength over the week, reflecting the fundamental scenario.
Crushing numbers remain at record levels for the period, according to data from the National Oilseed Processors Association (NOPA). In December, the crushing volume reached approximately 5.6 mln tons, nearly 5.7% higher than 5.7% in the same month last year, contributing to short-term gains on the Chicago Board of Trade. However, the ample supply expected in South America limits more significant upward movements, especially if the rain forecast for Argentina is confirmed, alleviating some of the climate concerns in the region.
USDA indicated that the US soybean output should hit 4.366 bln bushels in 2024/25, equivalent to 118.82 mln tons. Yield was estimated at 50.7 bushels per acre. In January, the forecasts were 4.461 bln (121.4 mln) and 51.7 bushels per acre, respectively. The market expected 4.451 bln bushels or 121.13 mln tons.
Final stocks are projected at 380 mln bushels or 10.34 mln tons. The market was betting on a carryover of 454 mln bushels or 12.36 mln tons. In the previous report, the figure was 470 mln bushels, or 12.79 mln tons.
In Brazil, despite concerns in the southern regions of Mato Grosso do Sul and losses in Rio Grande do Sul, Safras & Mercado projects a potential production of 173.7 mln tons. Several states in the Midwest have excellent crop quality, such as Mato Grosso and Goiás, where several locations indicate possible yields of up to 70 to 80 bags per hectare.
In this scenario, even if the regions affected by the dry season and hot weather result in greater production losses, other areas of the country end up compensating, which maintains the Brazilian crop with the potential to be the largest in history. As a result, the supply and demand scenario for soybeans was revised, leading production to a 14% increase over the previous crop and a sharp cut in imports to around 150 thousand tons or less. Adding the tight final carryover stocks, the total Brazilian supply in 2025 should be around 175.4 mln tons.
Processing should reach around 55.5 mln tons, distributed between 42.7 mln tons of soymeal and 11.3 mln tons of soyoil. Exports are estimated at 107 mln tons, which, if confirmed, will be a record and are in line with the outlook for Chinese purchases throughout the year. Given the supply and demand scenario, final stocks are projected at roughly 9.7 mln tons, accounting for an increase of 513% compared to the previous season.
