Soybean and Wheat Markets React to USDA's Latest Crop Projections
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Lower yields tighten US soybean market
For the US, the USDA slashed its 2023/24 soybean production estimates from 4,205 million bushels to 4,146 million bushels on the back of revisions lower in yields, whilst acreage was largely flat. This lower supply was partly offset by downward revisions in demand with export estimates cut by 35 million bushels, whilst domestic demand estimates were lowered by 10m bushels. As a result, 2023/24 US ending stock estimates were reduced from 245 million bushels to 220 million bushels. However, it was still higher than the roughly 213 million bushels the market was expecting.
For the global soybean balance, the USDA revised down 2023/24 global ending stocks marginally from 119.4mt to 119.3mt. The market was expecting a number of a little over 118mt.
Soybean supply/demand balance
Unfavourable weather weighs on wheat supply
The global wheat balance continues to tighten, with 2023/24 ending stocks lowered by 7mt to 258.6mt, which is quite some distance below just over 264mt as expected by the market. This tightening was driven by revisions lower in supply with 2023/24 global output cut by 6mt. Lower output is largely driven by Australia (-3mt), Canada (-2mt), Argentina (-1mt) and the EU (-1mt), primarily due to unfavourable weather conditions. These reductions were partly offset by expectations for higher Ukrainian output. The main concern for Ukrainian supply is whether it will all be able to make it onto global markets.
For the US market, the agency made no changes to the wheat balance.
Wheat supply/demand balance
