USDA releases lower than expected US final stocks, the market reacts quickly and the stock market is up on soybeans and corn and wheat feels the impact and falls.
The USDA (United States Department of Agriculture) released its new monthly supply and demand report this Friday (10), presenting data that surprised all market expectations. As a result, markets exploded on the Chicago Stock Exchange, with soybean and corn futures rising more than 3% this afternoon, while wheat felt the impact and fell.
Soybean Supply and Demand Report
Soybeans in the USA
U.S. soybean ending stocks were estimated at 10.34 million tonnes, down from 12.8 million tons in the December release. The USDA also cut the U.S. soybean crop from 121.42 million tons to 118.84 million tons, keeping exports at 49.67 million tons and crushing at 68.7 million tons.
Soybeans in the World
Global soybean production was also revised downwards, from 427.14 to 424.26 million tons, reducing final stocks from 131.87 to 128.37 million tons. Brazil's soybean crop was estimated at 169 million tons and Argentina's at 52 million tons. China's soybean imports are expected by the USDA at 109 million tons for the 2024/25 crop year.
Brazil: 169 million tons
United States: 118.84 million tons
Argentina: 52 million tons
China: 20.7 million tons
Paraguay: 11.20 million tons
Soybean Exports
Total soybean exports are estimated at 182 million tons, divided mainly between Brazil, the United States, Paraguay and Argentina. As the main exporters, Brazil and the United States will share 85% of the oilseed export market. Brazil will export 105.5 million tons, representing 58% of total exports, while the United States will maintain the 49.67 million tons forecast in December. Next come Paraguay and Argentina with 7.3 million tons and 4.5 million tons, respectively.
Corn Supply and Demand Report
Corn in the USA
Ending corn stocks were estimated by the USDA at 39.12 million tons, compared to 44.15 million tons last month. The report cut U.S. corn production to 377.63 million tons from 384.64 million tons. At the same time, the USDA reported a small decline in exports, from 62.87 million tons to 62.23 million tons.
Corn in the World
The department also presented a lower estimate for the world corn crop, falling from 1,217.89 to 1,214.35 billion tons, resulting in global ending stocks of 296.44 to 293.34 million tons:
Unit States: 377,63 miliion tons
China: 294,92 miliion tons
Brazil: 127 miliion tons
Argentina: 51 miliion tons
Ukraine: 26,5 miliion tons
Russia: 13,25 miliion tons
Corn Exports
Total corn exports are estimated at 191.41 million tons, divided mainly between Brazil, the United States and Argentina, which will share 76% of the global corn export market:
Unit States: 62,23 miliion tons
Brazil: 47 miliion tons
Argentina: 36 miliion tons
China
The USDA forecasts that China, the world’s leading soybean importer, will reduce its imports from 112 million tons to 109 million tons in the 2024/2025 season, keeping stocks slightly above the previous season, at 46.01 million tons. The world’s second-largest corn producer will produce 294.92 million tons and import only 13 million tons, with ending stocks of 206.18 million tons. China is virtually self-sufficient in corn and entirely dependent on soy protein.
Impact of 'La Niña' Phenomenon on South American Harvest
The 'La Niña' weather phenomenon continues to be a significant concern for agriculture in South America, especially in Brazil and Argentina. 'La Niña' is characterized by the cooling of the waters of the Pacific Ocean, which can alter global weather patterns, resulting in severe droughts in some regions and excessive rainfall in others.
Risks for the Soybean and Corn Harvest
Forecasts indicate that Brazil and Argentina may face adverse weather conditions due to 'La Niña', potentially affecting soybean and corn production. Prolonged droughts could reduce crop yields, while excessive rainfall could harm the harvest and grain quality.
Economic Impact
A smaller-than-expected harvest in South America could have significant impacts on the global commodity market. Reduced supplies of soybeans and corn could lead to price increases, affecting not only farmers but also consumers and the food industry. In addition, market volatility could create uncertainty for investors and commodity traders.
Conclusion
While the USDA report brought surprising data that positively impacted the soybean and corn markets, the 'La Niña' phenomenon represents a real risk for agricultural production in South America. It is essential that farmers and investors remain attentive to the weather conditions and their possible repercussions on the global commodity market.
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