ARKANSAS, January 15 (Future Headlines)- The latest World Agricultural Supply and Demand Estimates (WASDE) report from the United States Department of Agriculture (USDA), released on January 12, presents key insights into the soybean market for the 2023-’24 season. The report provides a comprehensive overview, covering soybean production estimates, price projections, and global trends. One notable highlight is the increase in the forecast for soybean oil use in biofuel production, accompanied by adjustments in soybean oil balance sheets and revisions in the soybean price.

  • U.S. Soybean Production and Supply

The USDA’s estimate for U.S. soybean production in the 2023-’24 season has been revised to 4.2 billion bushels, reflecting an increase of 35 million bushels from the previous month. This upward adjustment is primarily attributed to higher production in key states such as Illinois, Missouri, and North Dakota. Harvested area, however, witnessed a slight decrease of 400,000 acres to 82.4 million acres. The estimated yield stands at 50.6 bushels per acre, marking an increase of 0.7 bushels.

Despite a reduction in beginning stocks, soybean supplies in the U.S. have risen by 31 million bushels compared to the previous month. The export and crush forecasts for soybeans remain unchanged. The ending stocks projection sees an increase of 35 million bushels, reaching a total of 280 million bushels. The soybean oil balance sheet adjustments involve higher imports and biofuel use, along with lower exports and food, feed, and other industrial use.

  • Soybean Oil in Biofuel Production

A noteworthy aspect of the report is the USDA’s prediction for soybean oil use in biofuel production during the 2023-’24 season. The forecast has been revised upwards to 13 billion pounds, surpassing the December estimate of 12.8 billion pounds. This marks a significant increase from the 2022-’23 season, where an estimated 12.491 billion pounds of soybean oil went into biofuel production, compared to 10.379 billion pounds in the 2021-’22 season.

  • Price Projections

The USDA’s projections for soybean prices indicate a season-average price of $12.75 per bushel for 2023-’24, reflecting a decrease of 15 cents from the previous month. Similarly, the soybean meal price is projected at $380 per short ton, down by $10. The soybean oil price is forecasted at 54 cents per pound, representing a decrease of 3 cents.

  • Global Soybean Production and Trade

On the global scale, the report forecasts a rise in soybean production for the 2023-’24 season, reaching 399 million tons. This increase is driven by higher production estimates for countries such as Argentina, the U.S., Russia, China, Paraguay, and Bolivia, offset by a reduction in Brazil’s production. Favorable early-season rainfall has positively impacted yield prospects for Argentina and Paraguay, contributing to a production increase of 2 million tons and 300,000 tons, respectively.

China’s soybean crop is expected to reach 20.8 million tons, with an increase of 300,000 tons based on reports from China’s National Bureau of Statistics. Russia’s soybean production has increased by 400,000 tons to 6.8 million due to a higher yield. Conversely, Brazil’s soybean production is forecasted at 157 million tons, a decrease of 4 million from the previous month and 3 million tons lower than the record crop of 160 million tons in the previous year. Reduced rainfall in certain regions has impacted yield potential in Brazil.

Global soybean crush remains nearly unchanged, with adjustments in crush levels for various countries, including Brazil, Argentina, India, Bolivia, Egypt, and Thailand. Soybean meal trade and global soybean exports witness changes, reflecting higher exports for some countries and lower shipments for Brazil.

  • Global Soybean Ending Stocks

The report concludes with a forecast of global soybean ending stocks for the 2023-’24 season at 114.6 million tons, indicating an increase of 400,000 tons. This adjustment is primarily attributed to higher stocks in the U.S. and Argentina, partly offset by lower stocks in Brazil.

In summary, the USDA’s WASDE report for soybeans in the 2023-’24 season provides a comprehensive analysis of production, prices, and global trends. The increased forecast for soybean oil use in biofuel production and the nuanced adjustments in balance sheets reflect the dynamic nature of the soybean market, influenced by domestic and international factors.

Reporting by Kevin Wood; Editing by Sarah White