US and Brazilian soy gains ensure security of supply but China still holds sway: analyst

By Jane Byrne contact

- Last updated on GMT

US and Brazilian soy gains ensure security of supply but China still holds sway: analyst

Related tags: Supply and demand

The US Department of Agriculture (USDA) has raised its forecast for projected global soybean crop output to 314.4 million tons, up 1.6m on US and Brazilian gains in its World Agricultural Supply and Demand Estimates (WASDE), which were published yesterday.

“We haven’t seen a situation like this in years. It is almost a double whammy with the US soy crop being revised upwards, along with simultaneous higher expectations for the Brazilian soy harvest.

In tandem with those developments, we have the fact that the US soy stocks are at their highest level since 2006.

So with this potential soy glut, and confidence in the security of supply there will be continuous, downward pressure on prices.

And yesterday also saw crude oil prices plunge to their lowest levels in nearly six years, so the longer term outlook for the vegetable oil market is questionable, which in turn may add pressure to oilseed prices,”​ Jack Watts, lead analyst, cereals and oilseeds, with Agriculture and Horticulture Development Board (AHDB) Market Intelligence, told FeedNavigator.

And he said demand from China’s livestock farmers for soy will remain critical to market fundamentals, with that country accounting for about two-thirds of the world’s trade in soybeans.

Corn and soybean prices moved lower yesterday after the USDA released its WASDE publication​ along with quarterly grain stocks.

“The WASDE report has tempered expectations and reminded analysts, who had very early fears about the potential impact of the cold weather on US winter wheat planting along with ongoing concerns over Russia and Ukraine tensions, of the demand and supply fundamentals of the market.

Essentially, it confirms that there is a global surplus of feed grains,”​ said Watts.

US and global soybean crop estimates

The USDA report estimates US soybean production at 3,969 million bushels, up 11 million bushels with a lower harvested area more than offset with increased yields.

Soybean exports are increased 10 million bushels to 1,770 million in the estimates, which reflect record exports during the first quarter of the marketing year, said the US agency.

Global soybean production is projected at 314.4 million tons, up 1.6 million on gains for Brazil and the US.

The Brazil soybean crop projection is raised 1.5 million tons to a record 95.5 million, with the increase based on higher projected yields for Mato Grosso and Parana.

Soybean production is reduced for India on lower yields reflecting late planting and a short monsoon season.

US and global wheat outlook

US wheat supplies for 2014/15 are up slightly, said the USDA report.   

The agency raised its forecasts for global wheat supplies for 2014/15 by 1.7 million and said the forecast for the EU wheat is up by 0.1 million tons on updated government statistics. 

Global wheat trade for 2014/15 is raised with exports up 1.2 million tons on larger supplies and stronger demand in several importing countries. 

Exports are raised 1.0 million tons for EU and 0.7 million tons for Ukraine. 

“The EU increase stems from a fast shipment pace to date and expanded opportunities once Russia’s export duties take effect,”​ concludes the USDA report. 

They note that global wheat consumption figures for 2014/15 are projected higher, but only slightly, and this is predicated on increased feed use for Iran, Ethiopia, and Uzbekistan.   

US and global corn harvest projections

US corn production for 2014/2015 was estimated at 14.216 billion bushels, a 191 million bushel decrease from last month due to a reduction in yield estimates.

Corn yields were reduced by 2.4 bushels per acre to 171.0 bushels, although still a record.

Domestic corn use for 2014/2015 was lowered by 75 million bushels due mostly to a decrease in feed and residual use. But corn used for ethanol production was estimated 25 million bushels higher.    

Global course grain supplies were estimated 3.7 million tons lower as a result of the reduction in the US corn crop.

Foreign coarse grain supplies are raised slightly with higher corn production for India and EU and higher barley production for Ethiopia. India corn production is raised 1.0 million tons with higher-than-expected plantings reported for its winter crop. EU corn production is raised 0.4 million tons with higher production reported for Spain, Croatia, Hungary, and Bulgaria.

Sorghum consumption is raised for China, but lowered for Brazil and Japan.

The World Agricultural Supply and Demand Estimates (WASDE) report can be read here​.

Related news

Show more

Related product

The next step in optimizing profits in broilers

The next step in optimizing profits in broilers

Nuscience Group | 31-Mar-2017 | Technical / White Paper

With the increasing consumer pressure on antibiotic use and new regulations worldwide, the search for alternatives is still ongoing. Nuscience presents...

Related suppliers

Follow us

Products

View more

Webinars