GLOBAL- In its latest update, the International Grains Council (IGC) predicts a remarkable 7% year-on-year increase in global soybean production for the 2023-2024 season, reaching an unprecedented 395 million tons. 

This surge is primarily attributed to larger crops in South America, marking a significant milestone for the soybean market. The IGC also forecasts an 8% year-on-year jump in global soybean consumption, driven by increased demand for this versatile and widely used oilseed.

The overall grain production outlook for 2023-2024 is positive, with a 1% increase projected, primarily fueled by expectations for a robust world corn harvest. Despite a smaller year-on-year wheat output, it is still expected to be the second-largest on record, driven by higher feed demand.

The IGC’s report notes changes from October, including an upgraded outlook for maize (corn) due to better-than-expected yields in the United States. Additionally, an increased wheat figure reflects the latest updates for Ukraine, Russia, and Turkey.

Recent developments in the global grain markets were influenced by improved weather conditions in Brazil, leading to a drop in grain prices. Forecasts of much-needed rain in Brazil over the next seven days are expected to ease concerns about the Safrinha corn crop, which follows the soybean harvest and constitutes a significant portion of Brazil’s total corn production.

Despite the expiration of the UN-brokered Black Sea grain deal in July, Ukrainian grain exports continue via sea lanes. Focus is shifting to Northern Hemisphere new crops, with Ukraine potentially harvesting between 18 million and 20 million tons of winter wheat in 2024, compared to 22.2 million tons in 2023.

Challenges are noted in Europe, where wet weather in France is causing delays in planting winter wheat. European plantings and crop conditions in the coming weeks will be crucial to monitor.

Dry conditions in the north of Brazil, attributed to El Niño weather events, are impacting the soybean crop forecast, which was initially expected to be a record. Meanwhile, recent rainfall in Argentina has led to an increase in soybean area projections.

In the United States, strong demand for soybeans is observed, with record soybean crush reported by the US National Oilseed Processors Association (NOPA). Export demand for US soybeans, especially from China, has surged, with the highest weekly volume sales since 2012 reported by the USDA.

Looking ahead, soybeans are expected to drive sentiment in oilseed markets, including rapeseed. Initial estimates suggest a reduction in rapeseed planting areas in the EU for harvest 2024, with Germany’s winter rapeseed area expected to fall by 4-7% due to a combination of market prices and challenging weather conditions.

As the global soybean market experiences dynamic shifts, the coming months will be closely monitored for further developments in production, consumption, and market trends.

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