In the week ending 24th September, the US soybean harvest reached 12%, 7 percentage points (p.p) higher than the previous week and ahead of last year’s progress and the five-year average by 5 p.p and 1 p.p respectively, according to the USDA’s Crop Progress Report. While harvest progress has been positive, yield concerns have been exacerbated by declining crop conditions, with 50% of the crop rated to be in good-to-excellent condition, 2 p.p lower than trade estimates and down 5 p.p from last year’s levels. Accordingly, further cuts to the USDA’s 2023/24 crop estimates are anticipated by the market, with current estimates reported in September at a four-year low of 112.8 million metric tonnes (-1.4% m-o-m and -3.0% y-o-y). Looking at stocks ahead of the US Quarterly Grain Stocks Report (TBR: 29th September), market sources expect the US soybean stock to decline from year-ago levels, with trade estimates ranging from 0.216-0.270 billion bushels against last year’s level of 0.274 billion bushels. Despite the current bullish fundamentals surrounding the US crop, technical selling coupled with the anticipated surplus from South America has continued to limit upside price risks, with the latest US export sales for soybean and soybean oil down by 34.9% and 41.3% from year-ago levels as competitively priced Brazilian supply continues to shift trade flows. Accordingly, the CBOT soybean and soybean oil futures prices (Oct-23), fell by 0.97% w-o-w and 4.7% w-o-w to USc 1,302.6/60 lbs bushel and USc 58.86/lbs, respectively on 26th September.
