In its August World Agricultural Supply and Demand Estimates report, released on 11th August, the USDA cut its estimate for US soybean production for the 2023/24 season down by 2.2% month-on-month (m-o-m) to 114 million metric tonnes, on the lower end of trade estimates as reported by Mintec here. Similarly, in line with market expectations of a steeper cut, ending stocks for the new crop was revised downwards by 18.2% m-o-m; the cut to both production and endings stocks was due to dry weather conditions in the US impacting crop yield. Despite the cut to the US soybean crop, the CBOT soybean futures price (Aug-23) settled at USc 1,401.2/60 lbs bushel on the same day, falling by 0.8% from the previous day's settlement and by 3.0% week-on-week (w-o-w), as it came as no surprise to the market.
In South America, the USDA maintained its Brazilian and Argentinian crop estimates at 163 million metric tonnes and 48 million metric tonnes for the 2023/24 season. The expectations of yet another record Brazilian crop has led to higher South American soybean imports by China, with the latter’s soybean imports for the 2022/23 season raised to a record high. According to the USDA, China imported circa 84.5 million metric tonnes of soybeans through 10 months of the current season (October 2022-September 2023), with shipments from the US trailing off in April due to the availability of the competitively priced bumper Brazilian crop.
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