The USDA (US Department of Agriculture) has released its monthly demand and supply projections for vegetable oils. The USDA forecasts US soybean inventory to climb by 31% to 445mil bushels in 2024F/2025F from 340mil bushels a year ago. US soybean production is expected to increase to 4,450mil bushels in 2024F/2025F from 4,165mil bushels in 2023/2024F on the back of higher yields and planted areas. Soybean yield is estimated to improve to 52 bushels per acre in 2024F/2025F from 50.6 bushels per acre a year earlier. Planted areas are forecast at 85.6mil acres in 2024F/2025F vs. 82.4mil acres in 2023/2024F.
The USDA also forecasts higher world soybean inventory at 128.5mil tonnes in 2024F/2025F compared with 111.8mil tonnes in 2023/2024F. The increase in soybean stockpiles is not only due to higher inventories in the US but also larger stocks in Argentina and Brazil. In spite of the heavy rains in Brazil, which may affect production, USDA estimates soybean inventories in Brazil at 37.5mil tonnes in 2024F/2025F vs. 31.4mil tonnes in 2023/2024F. Soybean output in Brazil is anticipated to expand to 169mil tonnes in 2024F/2025F from 154mil tonnes in 2023/2024F.
Bloomberg reported that corn imports by China are poised to fall by a third in 2024F/2025F from a year earlier as the gap narrows between demand and local production. Soybean purchases from overseas are likely to decline by 1.6% in the coming crop year due to a shrinking hog herd and falling use of soybean meal in feed. According to the latest China Agricultural Supply and Demand Estimates, domestic corn output in 2024F/2025F is set to climb by 2.8%, reflecting an increase in planting acreage and higher yields while consumption of corn rise by 1.6%.
According to Bloomberg also, Bunge has suspended operations at its Rio Grande do Sul- based soybean crushing plant amid forecasts for more rains and floods. Activities at Bunge’s terminal at the port of Rio Grande have also been halted.
Reuters reported that Argentina has slashed millions of tonnes from its corn harvest projections for the current crop due to the leafhopper plague that can carry a stunt disease that damages cobs and kernels. Farmers fear such infestations could become more regular with fewer frosts in recent years to check the insect’s spread. Some farmers said that they will be sowing less corn in the next season in favour of other crops such as soybean, which is not affected by the insect. Some 10mil tonnes of Argentine corn production have been lost already and industry experts said it could fall further.
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