Global soybean market outlook turns toward Brazil's large impending crop
Although robust demand has recently supported soybean prices, the 2013/14 (October/September) soybean market outlook now hinges on the impending large crop forecast in Brazil, the world’s second-largest producer after the United States. The Brazilian forecast indicates a widening gap between soybean production and total use (crush plus exports), which may signal lower prices ahead. High prices are contributing to increased soybean area in Brazil, leading USDA to raise its 2013/14 soybean production forecast for Brazil to 89 million metric tons. The new forecast is up 1 million tons from the previous forecast, is well above last year’s record crop of 82 million, and is nearly equal to this year’s U.S. harvest of 89.5 million. Although abundant rainfall has created favorable growing conditions for Brazil’s 2013/14 soybean crop, the yield forecast is unchanged this month, with another 8-10 weeks of good weather needed if yields are to match or surpass the country’s 2010/11 yield record. While part of the increase in Brazilian supplies is expected to boost the country’s 2013/14 soybean crush and exports, the current outlook indicates a substantial increase in stocks. This chart can be found in the Oil Crops Chart Gallery, with supporting analysis in Oil Crops Outlook: January 2014.