Porto Alegre, December 17th, 2024 – The USDA’s December reports did not present significant changes to the current soybean market scenario, maintaining, for the most part, a bearish outlook for Chicago, which continues to operate on the sidelines at the moment. Regarding the estimates for the United States, the scenario remains favorable, with final stocks projected to be 37.4% higher than in the previous season, reaching nearly 12.79 mln tons. This occurs despite the projection of an increase in exports and soybean crushing for the 2024/25 season.
For the Argentine crop, there was a positive adjustment of 1 mln tons, driven by a favorable climate scenario, which generates good prospects for productivity. In the case of the Brazilian crop, USDA maintained its projection of 169 mln tons, without changes. Safras & Mercado believes in a larger volume, almost 172 mln tons, due to the potential production.
The global outlook for 2025 continues to indicate an ample supply of soybeans, with more than 427 mln tons projected. This should result in final stocks 17% higher than last season, with an expected 131 mln tons of soybeans in stocks. However, this estimate depends on the absence of significant losses in South American crops, especially considering the current climate scenario, which does not cause major concerns at the moment.
Soybean trading in Brazil continued at a slow pace last week, with the industry already supplied and exports almost completed. Demand in the physical market remains low, although firm and specific price offers are still emerging from buyers, which benefits those who still have lots to negotiate.
However, prices, especially for the new crop, continue to adjust in line with Brazilian production estimates. The new season premiums are reversing on the curve, which has put pressure on soybean prices at ports and, consequently, in the interior of the country. This spread between bids and offers has weakened the market and slowed down trading.
With the crop arrival in mid-February, buyers are expected to gain more space, which may result in falling premiums at harvest. An important point to note is that if the dollar remains at high levels, above BRL 6.00 for example, the decline in premiums may be accelerated, especially due to the elasticity of supply and logistical problems related to grain storage capacity.
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