Porto Alegre, February 17, 2021 – Generally speaking, the February report from USDA only confirmed the tightening of the global supply. It pointed to the production of 112.6 million tons for the United States and maintained Brazil’s 2020/21 crop at 133 million, and Argentina’s at 48 million tons. As a result, the projection for the world production hits 361.08 million tons in 2020/21, up 7% from the previous business cycle, which brings production back to the level of 2018/19.
On the demand side, we highlight the expected consumption of 117.7 million tons by China. This must drive the Asian giant’s imports to 100 million tons. Chinese aggressiveness ended up absorbing the US supply surpluses, with stocks projected at only 3.8 million tons, down 77% from the balance at the end of the previous business cycle.
World stocks must fall to 83.36 million tons on August 31. The world stock-consumption ratio drops to 22.5%. In the 2018/19 season, it was at 32.8%.
In the confrontation between production and consumption, the 2020/21 season must be marked by a deficit of 8.7 million tons of soybeans, which raises the negative sum of the last two seasons to a deficit of 26.9 million tons. In other words, the world soybean market left the surplus behind and now copes with a shortage, which justifies the sharp fall in stocks. It is not by chance that soybeans in Chicago have so significantly raised their performance level.