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US soybean ending stocks projected higher for MY 2024/25

Despite a boost in U.S. soybean meal exports, domestic meal demand has weakened, impacting overall projections.

Sunny Soybean Field Growing

The USDA's Economic Research Service has released its Oil Crops Outlook for June 2024, highlighting an increase in U.S. soybean ending stocks for marketing year (MY) 2024/25. The forecast now stands at 455 million bushels, up 10 million bushels from the previous projection. This rise is attributed to a reduction in the soybean crush forecast for MY 2023/24, which has been lowered by 10 million bushels to 2.29 billion bushels due to decreased domestic meal demand.

Despite robust U.S. soybean meal exports, which are up 21% from the same period last year, domestic demand has softened. The forecast for MY 2023/24 soybean meal exports has been increased by 0.2 million short tons to 16 million short tons, while domestic demand has been reduced by 0.4 million short tons. The annual soybean meal price remains steady at $380 per short ton.

Soybean oil production has risen with record soybean crushes and high vegetable oil imports. As of April, soybean oil stocks were 2.3 billion pounds. Despite a drop in April production, soybean oil prices have declined, prompting an increase in export forecasts for MY 2023/24 by 100 million pounds to 450 million pounds, and for MY 2024/25 by 100 million pounds to 600 million pounds.

Global oilseeds and rapeseed production

Globally, rapeseed production for MY 2024/25 has been reduced by 1.3 million metric tons to 87.1 million metric tons, primarily due to lower yields in the European Union (EU) and Australia. EU production is now forecast at 18.8 million metric tons, down 0.3 million metric tons from last month, while Australia's forecast has been lowered by 1.0 million metric tons to 5.5 million metric tons. Consequently, global rapeseed crush and ending stocks are expected to decline.

Brazil and India production updates

In Brazil, historic flooding in the State of Rio Grande do Sul has negatively impacted the soybean harvest for MY 2023/24. The estimated production has been lowered to 153 million metric tons, down 1 million metric tons from the previous forecast. The harvested area is reduced by 100,000 hectares to 45.8 million hectares. In contrast, India’s rice production for MY 2023/24 is forecasted to increase to 137 million metric tons, up 2% from last month.

Zambia and Australia's production forecasts

Zambia's corn production for MY 2024/25 is estimated at 1.51 million metric tons, a significant decrease due to severe drought conditions. Meanwhile, Australia's barley production for the same period is forecasted to increase by 6% to 11.5 million metric tons.

Market implications

The USDA report underscores a complex global oilseed market scenario with varying regional production impacts due to weather conditions and changing market demands. U.S. soybean ending stocks are higher due to reduced domestic crush, while global rapeseed production declines due to unfavorable weather in key producing regions. The report reflects ongoing adjustments in global agricultural production and trade dynamics as influenced by environmental and market factors.

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