The USDA's latest WASDE report released on January 12, 2024, which highlighted a significant decline in the Brazilian soybean crop estimates.
The report estimates the 2023/24 soybean crop to come in at 157 million metric tonnes, is a 2.5% decline compared to the previous month’s estimate. While the crop was revised lower than last season’s crop (-1.9%) for the first time since the initial estimate reported in April 2023, this revision was less steep than anticipated by the market.
The disparity between estimates by the USDA and other agencies including the Brazilian National Supply (CONAB) have led Brazilian farmers to raise concerns regarding crop overestimations. CONAB estimated this season’s Brazilian soybean crop to reach 155.3 million metric tonnes on January 10th.
Albeit estimated lower than the USDA’s latest crop revision, farmers in Brazil project the crop to be lower than both figures, with the average estimate at 135 million metric tonnes. This would be due to prolonged adverse weather in key producing regions. According to market sources, farmers have begun to stress the reality they face regarding the crop outlook, versus conflicting lower prices due to the outlook presented by these agencies.
The MBP for Soybean Oil FOB Brazil (Mintec Code: IU28) was assessed at $846.5/mt (-6.6% w-o-w), its lowest level since August 2020 on January 10th. This price is in conjuction with the upward revision of the USDA crop estimates, positive outlooks for the Argentinian 2023/24 crop, and the aggregate South American 2023/24 crop, compounding the downward price movements in global soybean and soybean oil prices.
Sounds crop estimates experience further revisions, Mintec will provide updates as they become available. Further insights and analysis can be explored on Mintec Analytics, where you’ll find real-time price tracking, expert commentary, and customized alerts. Book a demo today to unlock the actionable intelligence you need to stay ahead of the curve.
