US Soybean Cuts Fall Short of Expectations in USDA's Latest Report

US soybean cuts, but not enough

The USDA slashed its US soybean production estimates by 210m bushels to 4,300m bushels due to lower acreage. Again, this was expected, given the USDA’s recent acreage report, which highlighted a reduction in US soybean area. However, production estimates still came in above market expectations of 4,276m bushels. The reason behind this difference is the fact that the USDA decided to leave soybean yield estimates unchanged, despite the relatively poor condition of the domestic crop. Expectations for a lower crop mean that 2023/24 US ending stocks were lowered from 350m bushels to 300m bushels. However, this is still well above the roughly 206m bushels the market was expecting. So, it should be no surprise that CBOT soybeans settled almost 2.4% lower yesterday.

There were relatively small changes in the global soybean balance. The USDA reduced global soybean production estimates by 5.4mt to 405.3mt. However, this was driven by the US. Global ending stocks for 2023/24 were cut from 123.3mt to 121mt, which was broadly in line with market expectations.

 

Soybean supply/demand balance

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