Newsletter summary
USDA May supply and demand report cut Brazil's 2023x24 soybean production by 1 million tonsScroogemegawaysThe new season global soybean is expected to be loose, short-term bullish soybean prices. The price of domestic soybean meal affected by the flood in Brazil is strong, and the downstream demand is weak and stable. In terms of corn, the acreage of corn in the United States has declined, global production is expected to increase, and domestic food sources have tightened price shocks. The soybean meal strategy is cautiously bullish and the corn strategy is neutral.
Text of news flash
[the latest report from the United States Department of Agriculture shows that Brazilian soybean production has been cut by 1 million tons]
In the international market, the United States Department of Agriculture released a May supply and demand report this week, showing a reduction in Brazilian soybean production. It is reported that Brazil's soybean yield in 2023 in 24 is expected to be 1.Scroogemegaways.5.4 billion tons, a decrease of 1 million tons from previous forecasts. However, this adjustment does not include the potential impact of flooding on production in Brazil's producing areas, so there may be further declines in the future.
The USDA forecasts the global soybean balance for 2023 Compact 24, with Brazil's final inventory of 37.47 million tons, while the United States estimates production of 4.45 billion bushels and ending inventory of 445 million bushels. Argentina's production forecast for 2023max 24 has not been adjusted, but in 2024max 25, production is expected to be 51 million tonnes, exports of 5.5 million tonnes and ending inventory of 29.55 million tonnes.
Although the global soybean balance sheet for 2024 to 25 shows a loose yield forecast, it is important to note that this forecast is based on ideal weather conditions. In the future, it may be adjusted due to changes in area, weather and yield per unit area, which will have an impact on the short-term soybean market.
In the domestic market, the price of soybean meal was significantly supported due to the strength of Brazil's rising water. At the same time, the price of soybean meal continues to run strongly due to the dual effects of floods in Brazil and sowing weather in the United States. However, we need to pay attention to the inventory of downstream oil plants, the start-up situation, the change of rising water supply, and the impact of the weather in North and South America on soybean meal prices. Soybean meal prices are expected to maintain strong volatility in the short term.
[corn market analysis: supply pressure and demand change coexist]
The USDA's May supply and demand report also shows that the corn acreage in the United States in 2024 is estimated to be 90 million acres in 25, down from 2023 in 24. In addition, US final inventories are expected to reach 2.102 billion bushels, a six-year high, while global production is estimated at 1.21993 billion tons and ending stocks at 312.27 million tons.
In the international market, Argentina's corn production forecast for 2023 Compact 24 was lowered from 55 million tons to 53 million tons, while Brazil's corn production forecast was also lowered from 124 million tons to 122 million tons.
In the domestic market, the supply of grain sources has continued to tighten, the supply of food in the market has decreased, and the selling pressure has obviously weakened. Traders have a higher cost of building a database and a strong mentality of selling at a low price, thus supporting the market price. The fall in wheat prices has reduced the willingness of traders to move out of storage, leading to a further tightening of food supplies.
After the end of the phased replenishment of the stock, the demand of feed enterprises gradually decreases, and there are more substitutes for grain in the port, so it is difficult to release the domestic demand for corn. This week, we need to pay attention to the delivery rhythm of traders, the willingness of downstream enterprises to build warehouses, as well as imported grain and policy adjustments. Corn prices are expected to fluctuate this week.