• USDA has released its monthly demand and supply projections for vegetable oils, raising its forecast of US soybean for 2023/2024F to 340mil bushels from 315mil bushels due to lower exports and domestic consumption. We believe that the forecast for exports was revised downwards due to the drop in China’s demand. Comparing 2023/2024F against 2022/2023, US soybean inventory is expected to increase by 28.8% to 340mil bushels from 264mil bushels as exports are envisaged to fall by 14.7%.

• World soybean inventory is anticipated to rise by 12.7% to 114.2mil tonnes in 2023/2024F on the back of higher stocks in the US and Argentina. Soybean production in Argentina is expected to double to 50mil tonnes in 2023/2024F in the absence of drought. In Brazil however, soybean output is envisaged to ease by 4.3% to 155mil tonnes due to unfavourable weather conditions.

• DTN Progressive Farmer reported that retailers tracked in the fourth week of March showed all 8 major fertiliser prices were higher compared to the previous month. This marked the 2nd time all fertilisers have been higher this season. Two types of fertiliser continued to rise by a considerable amount. Urea was 8% more expensive compared to last month and had an average price of US$576/tonne. UAN28 (urea, ammonium and nitrate) was 5% higher and had an average price of US$360/tonne. Industry experts believe that there could be some UAN supply disruptions due to the collapse of the Francis Scott Key Bridge in Baltimore.

• The Biodiesel Magazine cited USDA data as saying that the country exported 30,041 tonnes of biodiesel and blends of B30 or greater in February. Biodiesel imports were 180,488 tonnes in February. US exported biodiesel to 9 countries in February. Canada was the top destination for US biodiesel exports at 25,814 tonnes, followed by Peru at 3,806 tonnes and Germany at 269 tonnes. USA imported biodiesel from 6 countries in February. Germany was the top supplier of biodiesel to USA at 68,327 tonnes, followed by Spain at 55,959 tonnes and Canada at 36,130 tonnes.

• Bangkok Post reported that rice exporters expect global prices to increase in 2Q2024 because of El Nino and India’s rice restrictions. As of 27 March, the price of Thai white rice was US$601/tonne while the prices for Vietnam were in the range of US$582/tonne- US$586/tonne and Pakistan at US$605/tonne-US$609/tonne. The price of Thai parboiled rice was US$606/tonne with parboiled rice from India in the range of US$551/tonne-US$555/tonne and Pakistan at US$618/tonne-US$622/tonne. In 2Q2024, the export volume may decrease slightly because of increased competition as Vietnam’s harvest season starts in March.

• Reuters reported that China may be poised to grow a record large corn crop in 2024F, besting the record in the previous year despite government incentives aimed at increasing plantings of soybean. This could keep Chinese corn supplies being plentiful enough to further reduce reliance on US corn exports especially with a possible production rebound next year for Brazil. USDA has forecast 2024F/2025F Chinese corn output to rise 2.4% to a record 296mil tonnes on improved yields and plantings.

Source: AmInvest Research - 15 Apr 2024