• The USDA (US Department of Agriculture) has released its monthly vegetable oils report. The USDA has raised its 2023E/2024F US soybean inventory to 245mil from 220mil bushels on the back of higher yields. The USDA is now assuming a yield of 49.9 bushels per acre vs. 49.6 bushels per acre previously. Comparing 2023E/2024F against 2022/2023E, however, US soybean production is expected to ease by 3.3% to 4,129mil bushels from 4,270mil bushels as planted areas are envisaged to decline by 4.5%.

• In spite of the lower US soybean inventory, global stockpiles are forecast to rise to 114.5mil tonnes in 2023E/2024F from 100.3mil tonnes in 2022/2023E. This is due to higher production in Brazil and Argentina. Soybean output in Brazil is estimated to increase by 3.2% to 163mil tonnes in 2023E/2024F from 158mil tonnes a year ago while in Argentina, soybean production expands to 48mil tonnes from 25mil tonnes in the absence of drought.

• Bloomberg reported that Nutrien, which is one of the world’s largest potash producers, has cautioned against any meddling in the economics of fertiliser markets. The warning followed an Iowa Corn Growers Association’s call for US scrutiny of fertiliser pricing and the impact of higher costs on farmers and consumers. The association said it is seeking increased transparency so that growers can better understand “recurring” price increases. The Iowa corn group is calling on Congress to add language in the next farm bill that would “review competition and transparency in the fertiliser industry” and mandate an assessment of pricing by the US Department of Agriculture.

• Bloomberg cited the Solvent Extractors Association of India as saying that India’s palm purchases will probably fall to 15mil tonnes in the current marketing year starting 1 November 2023 from a record 16.5mil tonnes a year earlier. Inbound shipments are likely to fall due to high carry-over stockpiles. India’s current edible oil reserves are estimated to be 3.5mil tonnes compared with the normal level of 2mil-2.2mil tonnes.

• Reuters reported that just months after Brazil harvested its largest ever corn and soybean crops, concerns are already brewing over the next crop as wild weather patterns are disrupting northern and southern soybean production areas. As of 2 weeks ago, farmers in Brazil planted 40% of their 2023E/2024F crops, slower than a year ago. Leading soybean state, Mato Grosso’s soybean planting reached 70% 2 weeks ago, falling slightly below historical pace. In the north of Mato Grosso, October was the hottest in at least a quarter century. Farmers may have to replant soybean fields, which could push back a second corn planting.

• Reuters cited a government official as saying that 200,000 hectares of oil palm plantations found in areas designated as forests in Indonesia are expected to be returned to the state, to be converted back into forests. Companies have to submit paperwork and pay fines to obtain cultivating rights on their plantations by 2 November 2023. While 3.3mil hectares out of the country’s 17mil hectares of palm plantations have been found in forests, only owners of 1.7mil hectares of plantations have been identified. The government is still cataloguing which of those are found in designated production forests (meaning owners will have to pay fines but they can continue to grow oil palm) and in protected areas that must be returned to the state.

Source: AmInvest Research - 14 Nov 2023