In the September WASDE report, the USDA cut its estimate for US soybean production, crush, exports and beginning stocks for the 2023/24 season, as anticipated by the market. US soybean production was revised downwards by 1.4% m-o-m to 112.8 million metric tonnes (-3.0% y-o-y), with harvested area offset by lower yield. The reduction in yield estimate was at the higher range of trade estimates of 49.6-51.0 bushels per acre (3.3 -3.4 MT/ha), as reported by Mintec here, down 0.8 bushels from August to 50.1 bushels per acre (bpa) (3.4 MT/ha) due to deteriorating crop conditions in the US following prolonged dry weather in major growing states, including Kansas (-17.1% m-o-m) and Louisiana (-12.2% m-o-m). However, a source told Mintec that the USDA may have been cautious with its cut, adding that “the crop could probably end up between 48 bpa with the impact of the heat and lack of rainfall over pod fill unlikely to be reflected in this month’s update.” Further crop deterioration was highlighted in this week’s USDA’s Crop Progress Report, with crop rated in good-to-excellent condition down from 53% to 52%, representing a 4 percentage point (p.p) decline compared to the same period last year, albeit 1 p.p higher than trade estimates. Similarly, beginning stocks for the 2023/24 season were revised downwards by 12.8% m-o-m, reflecting higher-than-expected exports in the 2022/23 season, albeit at a steeper rate than anticipated by the market. As the cuts to supply-demand fundamentals were less bullish than market players’ expectations, the CBOT futures soybean and soybean oil prices (Sept-23) both settled lower on the day by 1.5% and 0.9% to USc 1,331.6/60 lbs bushels and Usc 62.72/lbs, following the release of the report.
