Global Soybean Stocks Decline as Argentina, Paraguay Face Production Cuts by Amit Gupta, Kedia Advisory
The USDA's 2024/25 soybean supply and use projections for the U.S. remain unchanged, with the season-average price lowered to $10.10 per bushel, down 10 cents. While soybean meal and oil prices remain stable, global soybean forecasts indicate reduced production, higher use, and lower ending stocks. Argentina and Paraguay face production declines due to heat and dryness, while Brazil’s outlook remains steady at 169.0 million tons. Global soybean crush is increased due to strong Brazilian margins and biofuel demand, though Paraguay sees lower crushing. With minimal changes in exports, global ending stocks are lowered by 4.0 million tons to 124.3 million, primarily due to reductions in Argentina and Brazil.
Key Highlights
# U.S. soybean projections remain unchanged, with prices lowered to $10.10 per bushel.
# Argentina and Paraguay see reduced production due to heat and dryness.
# Brazil’s soybean output remains at 169.0 million tons despite mixed weather conditions.
# Global soybean crush rises on stronger Brazilian margins and biofuel demand.
# Global ending stocks drop 4.0 million tons, mainly from Argentina and Brazil.
The U.S. Department of Agriculture (USDA) has kept its 2024/25 soybean supply and use projections unchanged, but the season-average soybean price is revised lower to $10.10 per bushel, reflecting a 10-cent decline from the previous estimate. Soybean meal and oil prices remain stable at $310 per short ton and 43 cents per pound, respectively.
Global soybean production faces downward revisions, with Argentina and Paraguay seeing lower output due to persistent heat and dryness in January. Meanwhile, Brazil’s production remains at 169.0 million tons, as beneficial weather in the Center-West supports yields, although drier conditions in the south have accelerated crop development at the expense of productivity.
Supporting soybean prices is an increase in global soybean crush, driven by favorable margins in Brazil, robust biofuel demand, and a strong pace of soybean meal exports. However, Paraguay’s lower supplies have resulted in reduced crushing and soybean meal exports.
The global soybean market continues to tighten, with ending stocks declining by 4.0 million tons to 124.3 million tons. The reduction is primarily due to lower stocks in Argentina and Brazil. With minimal changes to export projections, supply constraints in key South American regions could influence market trends in the coming months.
Finally
Lower production in Argentina and Paraguay, coupled with strong Brazilian demand, is tightening global soybean stocks. Prices may see support as supply constraints develop, impacting future market dynamics.
