USDA’s bearish report surprises and puts pressure to soybean on Chicago

74

     Porto Alegre, October 18, 2021 –  The expected October supply and demand report from the United States Department of Agriculture (USDA), released last Tuesday (12), focused the market’s attention last week, bringing great volatility to CBOT futures contracts.

     Although USDA confirmed the direction of the adjustments in the US production and stocks, the size of them surprised, which ended up having a strong negative impact on Chicago. As a result, futures contracts reached a new level, with the spot contract (November/21) testing the important support of USD 12.00 per bushel.

     Therefore, even with the dollar at BRL 5.50 and firm premiums, domestic prices lost strength in Brazil. Business during the week was only isolated, and growers continue to focus on planting, which has advanced well with a favorable climate.

     The USDA’s October report indicated that the US soybean crop is expected to stand at 4.448 billion bushels in 2021/22, equivalent to 121.05 million tons. The market was expecting 4.409 billion or 119.99 million. In September, the indication was 4.374 billion bushels or 119.058 million tons.

     Yield was raised from 50.6 to 51.5 bushels per acre, while the market estimated 51.1 bushels per acre.

     Ending stocks are projected at 320 million bushels or 8.7 million tons. The market was betting on carryover of 289 million bushels or 7.87 million tons. Last month, ending stocks were estimated at 185 million bushels or 5.03 million tons.

     Crush was estimated at 2.190 billion bushels (59.6 million tons) and exports at 2.090 billion bushels (56.88 million tons). In September, the numbers were 2.180 billion (59.33 million tons) and 2.090 billion (56.88 million tons), respectively.

     For the world table, USDA projected the global soybean crop in 2021/22 at 385.14 million tons. Final stocks are estimated at 104.57 million tons. The market was expecting ending stocks of 101 million tons. In September, USDA had indicated the production of 384.42 million and stocks of 98.89 million tons.

     USDA projects the US crop at 121.06 million tons, against 119.04 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 51 million tons. Chinese imports are expected to reach 101 million tons.

     For the 2020/21 season, the estimate for the world crop was 365.26 million tons. Carryover stocks are projected at 99.16 million tons. The market was betting on stocks of 96.4 million tons.

     Brazil’s production was maintained at 137 million. The Argentine crop hit 46.2 million tons. The forecast for Chinese imports was maintained at 99 million tons.

Copyright 2021 – SAFRAS Latam