The latest USDA Export Sales report, released this morning, sheds light on the export trends for wheat, soybeans, and corn, offering insights into the global agricultural market dynamics.

Brazil, renowned as the world’s largest exporter of soybeans, has made significant strides in its harvest progress. As per consultancy Conab, approximately 87% of the harvest is complete. Despite earlier concerns regarding adverse weather conditions, the production forecast remains unchanged from previous estimates, with the USDA projecting 155 million metric tons for the South American giant.

Despite challenges posed by weather fluctuations, export projections remain optimistic. USDA forecasts indicate an increase in soybean exports to 103 million metric tons, a notable uptick from the previous year’s figures of 95.5 million metric tons.

Safras & Mercado’s latest supply and demand estimate for Brazilian soybeans paints a nuanced picture of the market landscape. Projections for 2024 indicate a slight decline in soybean exports compared to the previous year, with an expected total of 96 million metric tons. This forecast reflects a 6% decrease from 2023 levels, albeit remaining within anticipated ranges.

Safras’ analysis delves deeper into various aspects of soybean production and demand. Noteworthy projections include a decrease in total supply by 4%, reaching 156.54 million metric tons, alongside a corresponding 4% decline in total demand. Despite these adjustments, ending stocks are expected to experience a significant decrease, further influencing market dynamics.

Edible oil imports, including soybean and palm, have witnessed significant growth during the first three quarters of the current financial year, marking notable increases compared to the corresponding period of the previous year.

During the initial three quarters of the current financial year, edible oil imports surged by 53.07% compared to the imports recorded during the same period last year. This substantial increase underscores shifting dynamics in the edible oil market.

Last week, oil prices experienced a downturn following a relaxation of tensions in the Middle East. However, this week witnessed a resurgence in prices fueled by positive data concerning the US economy, a reduction in US oil inventories, and heightened demand for vegetable oils utilized in biodiesel production.

US Economic Data

In April, business activity in the United States declined to a four-month low, leading to a depreciation of the dollar. During such periods, investors typically seek alternative assets, resulting in increased demand for oil.

According to the weekly report by the Energy Information Administration (EIA), as of April 19, crude oil stocks in the US decreased by 6.37 million barrels, defying analysts’ expectations of a 2 million barrel increase. Additionally, distillate stocks rose by 1.6 million barrels, while gasoline stocks declined by 634 thousand barrels, contrary to forecasts of a 1.75 million barrel decrease.

Despite the reduction in inventories, crude oil production in the United States remained relatively stable at 13.1 million barrels per day during April 13-19, slightly lower than the recent record of 13.3 million barrels per day. Furthermore, the number of active oil rigs in the US surged by 5 units to reach a seven-month high of 511 units during the same period, indicating a potential increase in production in the near future.

Despite a decline in exports, June palm oil futures on the Bursa Malaysia exchange remained steady at 3,940 ringgit/t or $825/t. This stability, despite a 1.8% decrease for the week and a 9.5% decrease over two weeks, can be attributed to high oil prices and the prevailing heat wave in Malaysia.

Conversely, May futures for soybean oil on the Chicago stock exchange experienced fluctuations, rising initially on Monday but subsequently falling to 982 $/t. This decline, totaling 0.9% for the week and 6.6% for two weeks, was driven by increased harvesting in Argentina and amplified soybean processing.

Projections from the Foreign Agricultural Service of the US Department of Agriculture (FAS USDA) indicate a 14% increase in soybean production volumes in Nigeria for the 2024/25 season. This growth is attributed to an expansion of cultivated areas, expected to rise by 200 thousand hectares to reach 1.35 million hectares.

The surge in soybean production is driven by several factors, including rising costs associated with cultivating alternative crops such as corn and rice. Soybeans offer a more cost-effective alternative, particularly in terms of fertilizer requirements, thereby attracting greater interest from Nigerian farmers.

The FAS USDA also anticipates a significant surge in oilseed exports from Nigeria, with projections indicating a rise from 7 thousand tons in the 2023/24 marketing year to 212 thousand tons in the upcoming season.

In Argentina, soybean processing volumes surged by 0.6 million tons compared to February, reaching 2.99 million tons. The first quarter witnessed record-breaking processing levels, totaling 7.48 million tons, indicative of sustained growth in the sector.

The country also experienced an uptick in exports of soybean oil and meal, with March figures reaching 453,000 tons and 2.16 million tons, respectively. Overall, Argentina supplied 5.23 million tons of soybean meal and 1.3 million tons of soybean oil to international markets in the first quarter.

In contrast, sunflower processing volumes declined in Argentina, with last month’s figures slipping to 374,000 tons. However, overall oilseed processing for the first quarter remained stable compared to the previous year.

In conclusion, the soybean market’s intricacies reflect a delicate dance of supply, demand, and global dynamics. As we navigate these fluctuations, staying attuned to market trends and agricultural forecasts is paramount across the supply chain. So we are predicting that soybean market project a Neutral  trend Projections and as well in hovering within the range of $11.0 to $12.0 per bushel.