W45: Soybean Update

Published Nov 18, 2023
W45: Soybean Update

In W45 in the soybean landscape, the United States Department of Agriculture's (USDA) Nov-23 global forecast for the 2023/24 soybean season indicates increased supply and demand. This is primarily based on lower starting stocks, higher production, elevated milling levels, and reduced ending stocks. The opening stocks decreased by 1.6 million metric tons (mmt), reflecting adjustments to the previous year's balances for China and Brazil. China's initial stocks are decreasing due to lower soybean imports in the 2021/22 and 2022/23 seasons, along with higher demand in the 2022/23 season. Conversely, Brazil's initial stocks have increased due to the larger 2022/23 harvest, reaching 158 mmt.

Meanwhile, global soybean production for the 2023/24 season has increased by 900 thousand metric tons (mt) to 400.4 mmt. This upward revision is due to higher production levels in Russia, Ukraine, and the US. The rise in global demand for soybeans is driven by increased demand from China and Russia. Despite higher stocks in Brazil and the US, global soybean ending stocks have decreased by 1.1 mmt, as this increase was more than offset by lower stocks in China.

As of November 5, the US soybean harvest had reached 91% completion. This figure is slightly behind 93% in the previous year but ahead of the five-year average of 86%. According to forecasts from the USDA, the gross soybean harvest for this season is expected to decrease to 111.7 mmt, representing a 4% decline compared to the previous season and a 2% decrease compared to the five-year average. The USDA estimates the export potential of soybeans at 47.8 mmt, reflecting a 12% reduction compared to the last season.

In 2023, Brazil is poised to set a record in the soybean complex export volume, reaching 125.40 mmt, a substantial 23.3% year-on-year (YoY) increase compared to the previous year's volume of 101.68 mmt. This record-breaking figure is based on estimated shipments, including 101 mmt of soybeans (a 28.3% YoY increase), 22 mmt of soybean meal (an 8.1% YoY increase), and 2.4 mmt of soybean oil (a 7.6% YoY decrease).

As of Thursday, November 9, the planting progress for Brazil's 2023/24 soybean harvest has reached 51% of the estimated area, showing an increase from 40% in the previous week, but slightly behind the 57% recorded in the same period in 2022. In Mato Grosso, despite a predominantly dry week, sporadic rains have facilitated greater planting progress compared to the previous week. However, some areas still grapple with low humidity, necessitating replanting and potentially negatively impacting the corn harvest window in early 2024.

Mato Grosso's estimated soybean production in the 2023/24 season remains stable at 43.78 mmt. This figure is unchanged from the Oct-23 forecast, despite uncertainties in climate conditions that led to planting delays. The forecast for the planted area with soybeans in Mato Grosso for the same harvest period is also stable at 12.22 million hectares (ha).

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