Oct 12 / Pedro Schicchi and Thaís Italiani

Post-WASDE Monthly Report - 2023 10 12

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"Results of the USDA's October report"

Soybeans: Neutral / Bearish

Figure 1: US Soybean - Ending stocks (M bu)

23/24 US soybean yields came very close to the bottom of expectations. With no changes to the area, production also dropped close to the lower end of the market’s range, at 4,104M bu.

Part of this drop was offset by the higher carryover from 22/23. On demand, the September trim to crush was reversed, but exports were reduced by 35M bu, leading to unchanged ending stocks, -5% smaller than the market’s median estimated.

23/24 world stocks also came to the bullish side of expectations, with trims in Brazil, Argentina, and China’s ending stocks. Additionally, Argentina’s 22/23 exports of soybean meal and oil and oil were adjusted downwards.

Corn: Bearish

Figure 2: US Corn - Ending stocks (M bu)

23/24 US balance also came to the bullish side, but not by as much as beans. Yields fell, and so did production. On the demand side, exports and feed were trimmed by 25M bu each.

In the end, with the demand cut, ending stocks were about 2% smaller than the median estimate. Still in “bullish” territory, but closer to neutral. However, we have to remember that above 15B bu is still a very large production number for the US.

Ukraine’s 22/23 exports were trimmed by 1M mt, which is turn led to higher carryover and ending stocks in 23/24. Apart from that, nothing else too exciting took place, and world 23/24 stocks were practically unchanged at neutral territory.

Wheat: Bullish

Figure 3: World Wheat - Ending Stocks (M ton)

It was not this time that the global wheat supply situation has improved; on the contrary, production has been revised downwards (-4M mt). However, world consumption is also expected to be lower (-4M mt), thus leaving the ending stock similar/slightly tighter to last month's picture (confirming to be the lowest since 15/16).

As expected, higher production in the US (+2M mt) offset some of the cut in other countries, such as Australia, Kazakhstan and Ethiopia, but it wasn't enough.

Also on the supply side, local figures from Russia that showed higher production were not incorporated by the USDA. However, the agency did act to increase Russian exports by 1M mt.

WASDE Commentary — Grains

Written by Alef Dias

Written by Pedro Schicchi
Reviewed by Thaís Italiani


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