U.S. soybean supplies have been particularly weighty since the United States entered a trade war with top buyer China last year, and a record-large crop only added to the glut. U.S. corn stocks have also been rising, which was not originally expected to happen.
Conab increased their estimate of the 2018/19 Brazilian soybean production by 0.49 million tons to 114.3 million. The 2018/19 Brazilian soybean harvest is nearing completion with only a few per cent of the crop left to harvest. At the current estimate (114.3 million tons) the 2018/19 Brazilian soybean production is down -4.2% or 4.9 million tons from last year’s production of 119.2 million tons.
WASDE USDA report was mostly bearish, as US soybean export estimate down by 100 million bushels as trade issue between USA & China on board. The Brazilian crop unchanged, as expected, but the Argentine crop grew a bit larger than anticipated. Add in a 0.5 MMT increase in the Indian crop estimate and the world production figure increased to a new record level of 362.1 MMT. And the USDA increased the Argentina ending stocks level by 2.65 MMT to almost 31 MMT. The Chinese import estimate was (finally) reduced by 2.0 MMT, with a corresponding decline in the crush forecast.
Overall fundamental is bearish along with trade issues with China and demand is expected to remain in a weaker side.