The Department of Agriculture on Thursday lowered its U.S. soybean export forecast as Brazilian competition hinders American sales in key foreign markets.
The latest World Agriculture Supply and Demand Estimates also shrank projected corn usage, leading to a 10-million-bushel increase in ending stocks. But the most noteworthy item in Thursday’s report for Mac Marshall, vice president of market intelligence for the United Soybean Board, was how USDA incorporated the lower exports figure into the overall increased ending stocks.
“The export pace has slowed down over the last couple of weeks as cheap Brazilian beans have been on the market,” he said in an interview with Agri-Pulse. “We're naturally that seasonal time of the year when the market is increasingly turning to Brazil.
Marshall noted the seasonal nature of Brazilian beans looming large in export markets, but did note there is “increased competitiveness” and a “wider spread than normal.”
Brazil’s total soybean production was cut to 156 million tons, a 1-million-ton reduction on lower yields offsetting higher acreage figures. The cut was actually smaller than many traders expected, with Marshall noting some were expecting a figure closer to 150 million.
The report is the last before USDA’s Ag Outlook Forum, scheduled for next week in Arlington, Virginia. Marshall noted many traders consider the February WASDE a “minute report” for that reason unless, there are “notable updates” such as a “significant deterioration or acceleration of South American crops.”
USDA also trimmed global corn production based on reductions in Brazil, Mexico and Serbia offset by smaller increases in India and Turkey.
Rice stocks were slightly increased in the report, which left domestic use unchanged. Sugar supplies were cut by more than 23,000 short tons due to lower sugar beet production outpacing increases in sugar cane production. Cotton ending stocks were reduced on higher exports, lower domestic use and unchanged production.
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