The continued dryness in South America has led the US Department of Agriculture (USDA) to revise the forecast of global soybean production considerably downward.
Expectations for world trade, processing and season-ending stocks were adjusted accordingly.
In its latest report, the USDA significantly lowered its forecast of global soybean supply and demand. The biggest adjustment was in global production, which was forecast down 9.22 million tonnes to 372.56 million tonnes. The running crop year will presumably still exceed the 2020/21 season by 1.7%.
The main reason for the reduction was anticipated harvest losses as a consequence of the continued dryness in South America. More specifically, production in Brazil, the world's biggest soybean producer, was lowered 5 million tonnes to 139 million tonnes.
According to investigations conducted by Agrarmarkt Informations-Gesellschaft, the soybean harvest in Argentina is also likely to be smaller at 46.5 million tonnes (down 3 million tonnes). The same applies to Paraguay, where the harvest is expected at 8.5 million tonnes, around 1.5 million tonnes down from the December estimate.
The forecast of global soybean processing was also forecast down 2.02 million tonnes to 325.72 million tonnes - translating to a 10.15 million tonne rise over the previous year.
The downward revision was based on lower expectations for Brazil, Argentina, Egypt and Paraguay. As a consequence of the decline in global output, global stocks are likely to decrease in the 2021/22 marketing year.
The current estimate is for 95.2 million tonnes, down around 6.8 million tonnes from the December forecast. This translates to an expected decline of 4.7 percentage points over the 2020/21 season. The main reason for the revision was smaller ending stocks in Brazil and Argentina due to lower harvest expectations.
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