Porto Alegre, September 14, 2021 – The September supply and demand report from the US Department of Agriculture (USDA) focused the market’s attention last week. Players had already positioned themselves waiting for increases in the projections for the US production and stocks for the 2021/22 season. USDA confirmed the market sentiment, but the adjustments exceeded expectations, bringing a bearish tone to the report. Even so, Chicago reacted positively, with players weighing secondary data such as acreage reduction and higher Chinese demand. Moreover, technically, players repositioned themselves given the apparent ‘exaggeration’ in the devaluation of contracts. The market shows that the level of USD 12.50 a bushel is an important support, even with slightly higher stocks. The market is also starting to look more closely at the new Brazilian crop, which may have a slower planting start due to the lack of moisture in the Midwest and Southeast so far.
USDA indicated that the US soybean crop must hit 4.374 billion bushels in 2021/22, equivalent to 119.04 million tons. The market was expecting 4.363 billion or 118.74 million. In August, the indication was 4.339 billion bushels or 118.08 million tons.
Productivity was raised from 50.0 to 50.6 bushels per acre, while the market had estimated 50.3 bushels per acre.
Ending stocks are projected at 185 million bushels or 5.03 million tons. The market was betting on carryover stocks of 178 million or 4.84 million tons. Last month, ending stocks were estimated at 155 million bushels or 4.22 million tons.
USDA indicated the crush at 2.180 billion bushels (59.33 million tons) and exports of 2.090 billion (56.88 million tons). In August, the numbers were 2.205 billion (60.01 million tons) and 2.055 billion bushels (55.93 million tons), respectively.
For the 2020/21 season, USDA raised the forecast for carryover stocks from 160 to 175 million bushels – from 4.54 to 4.76 million tons. The market was betting on 166 million bushels or 4.52 million tons.
For the global picture, USDA projected a global soybean crop of 384.42 million tons in 2021/22. Final stocks are estimated at 98.89 million tons. The market was expecting ending stocks of 96.9 million tons. In August, the USDA indicated production at 383.63 million and stocks at 96.15 million tons.
USDA projects the US crop at 119.04 million tons, against 118.08 million in the previous report, as already mentioned. For Brazil, the forecast is for a production of 144 million tons. Argentina’s output is estimated at 52 million tons. Chinese imports must hit 101 million tons.
For the 2020/21 season, the estimate for the world crop was 363.27 million tons. Carryover stocks are projected at 95.08 million tons. The market was betting on stocks of 92.5 million tons.
Brazil’s production was maintained at 137 million. The Argentine crop stood at 46 million tons. The forecast for Chinese imports was raised from 97 to 99 million tons.
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