The latest World Agricultural Supply and Demand Estimates report from USDA shows notable reductions to the South American soybean crop, representing demand potential for U.S. soybeans. Mac Marshall, USB and USSEC Vice President of Market Intelligence, says drought in South America is taking a toll on the soybean crop there.
“We saw for the second consecutive month pretty notable cuts across Brazil, Argentina and Paraguay. And you total it up across those three countries, it’s a reduction of over 18 million tons relative to December, going from 203 and a half to about 185. You saw Brazil’s export forecast taken down by 3 and a half million tons, it was at 94 million tons last month, now down to 90 and a half. And then on the U.S. side, as we have that decline in South American production, that of course means lower crush in Argentina, and some of that has offset the higher crush in the U.S.”
Putting all the data together, Marshall says the report affirms a positive pricing environment for U.S. soybeans.
“This is definitely a great pricing environment. We’re also already seeing some ample demand for new crop beans. The start of the calendar year 2022, we’ve seen purchases from unknown destinations and China totaling up 1.9 million tons. So, substantial forward demand as well, even as we look beyond marketing year 21-22.”
Marshall says the report is the latest testament to ongoing work by the United Soybean Board to build new markets and demand for U.S. soybean farmers.
“I encourage everyone to check out unitedsoybean.org to see all the initiatives that we are undertaking in terms of market research, development and promotion. And ussec.org, the United States Soybean Export Council, is a great place to hear about our international marketing initiatives. And of course, to stay up to date on all the latest developments and innovations, we’re rolling out a new strategic plan which we’re all very excited about. I encourage everyone to check out ussoy.org.”