The USDA’s July monthly supply and demand report, released on Friday (10), brought some surprises to the market. Although the Department indicated adjustments in the same direction expected by the market, their size was different than expected. USDA raised U.S. production and stocks for the 2020/21 season as well as the 2019/20 season stocks. The market considered the numbers bearish in general, even with minor increases for the new season.
USDA indicated that the U.S. soybean crop is expected to stand at 4.135 billion bushels in 2020/21, equivalent to 112.54 million tons, above the previous estimate of 4.125 billion or 112.26 million. The market was betting on a crop of 4.167 billion or 113.4 million tons.
Final stocks are estimated at 425 million bushels or 11.57 million tons. The market bet on carryover of 443 million or 12.06 million tons. In the previous report, stocks were projected at 395 million bushels – 10.75 million tons.
USDA indicated the crush at 2.160 billion bushels (58.79 million tons) and exports of 2.05 billion (55.79 million tons). In June, the projections were 2.145 billion (58.38 million tons) and 2.05 billion (55.79 million tons), respectively.
The 2019/20 production is estimated at 3.552 billion bushels (96.67 million tons). Final stocks in 2019/20 are projected at 620 million bushels (16.87 million tons), while the market was betting on 589 million (16.03 million tons). In the previous report, the figure was 585 million (15.92 million tons). Crush is estimated at 2.155 billion (58.65 million tons), and exports at 1.65 billion bushels (44.90 million tons).
As for the world scenario, USDA projected the world soybean output in 2020/21 at 362.52 million tons. In June, the number was 362.85 million tons.
Final stocks are estimated at 95.08 million tons. The market expected final stocks of 97.7 million tons. In June, the forecast was 96.34 million tons.
USDA projects the U.S. output at 112.54 million tons, as already mentioned. For Brazil, the forecast is for a production of 131 million tons. Argentina is expected to produce 53.5 million tons. The estimate for Chinese imports in 2020/21 is 96 million tons.
For 2019/20, the USDA indicated a crop of 337.14 million tons. Final stocks are projected at 99.67 million tons, while the market was betting on 99.5 million. The Brazilian production had its estimate raised from 124 to 126 million tons. The market had predicted 123.4 million.
The Argentine crop was maintained at 50 million tons, meeting the market expectations. Chinese imports were increased from 94 to 96 million tons.