The USDA’s October report, released last Thursday (10), draw the market attention. The USDA confirmed the market sentiment and brought cuts to US soybean production and stocks estimates from the September report. Although USDA confirmed the cuts, their sizes were surprising and larger than expected. The new numbers bring fundamental support to Chicago, preventing significant negative short-term adjustments.
The 2019/20 production is now estimated at 3.550 billion bushels, or 96.62 million tons. The market expected 3.571 billion or 97.19 million tons. In the September report, the forecast was 3.633 billion bushels or 98.87 million tons. For 2018/19, the forecast is reduced to 4.428 billion or 120.51 million tons.
Ending stocks in 2019/20 are projected at 460 million bushels, equivalent to 12.52 million tons, while the market was betting on around 13.88 million. In the previous report, the forecast was 640 million bushels or 17.42 million tons.
The forecast for US exports remained at 1.775 billion bushels. Crush is projected at 2.12 billion bushels, against 2.125 billion in the previous report.
Regarding the world scenario, the USDA projected the world soybean crop in 2019/20 at 338.97 million tons. In the previous report, the forecast was 341.39 million.
Ending stocks are estimated at 95.2 million tons. The market was expecting 96.9 million tons. In September the forecast was 99.2 million.
USDA bets on a US output of 96.2 million tons, against 98.87 million forecast in September, as already commented. For Brazil, the forecast is for a production of 123 million tons. Argentina is expected to produce 53 million tons.
Production in 2018/19 had its projection indicated at 358.77 million tons. Ending stocks were reduced from 112.4 to 109.9 million tons. The market was betting on 110.7 million tons.
The Brazilian crop was maintained at 117 million tons, while Argentine production was estimated at 55.3 million tons.
The estimate for Chinese imports in 2019/20 was maintained at 85 million tons. In the previous year, the number was 83 million tons.