Soybean meal in bags

(Photo: Iowa Soybean Association)

Latest WASDE report highlight Argentina climate issues

March 15, 2023 | Jeff Hutton

Dry weather woes in Argentine were reflected in the March 2023 U.S. Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimate (WASDE) report.

In the report, global 2022/23 oilseed supply and demand forecasts include lower production, crush and stocks. Global oilseed production is reduced 6.8 million tons to 629.9 million, mainly on lower soybean and sunflower seed production for Argentina, partly offset by higher rapeseed production in Australia. Soybean production for Argentina is lowered 8 million tons to 33 million on the dry and hot weather conditions there.

Global oilseed trade is up 1.9 million tons to 199.9 million on higher rapeseed and soybean exports. Soybean exports are higher for both Brazil and the United States, and imports are higher for Argentina to partly offset production losses. Soybean imports are also raised for Iran and Turkey.

Global 2022/23 oilseed crush is lowered 3.3 million tons to 526.3 million, mainly on a slower-than-expected soybean crush pace for China and lower available soybean and sunflower seed supplies for Argentina. The WASDE report noted lower Argentina vegetable oil exports are offset by higher shipments of palm oil from Malaysia and sunflower seed oil from Turkey, Russia and Ukraine. Global soybean ending stocks are lowered 2 million tons to 100 million, with lower stocks for Argentina, Brazil and the United States that are partly offset by higher stocks for China.

Meanwhile, U.S. soybean supply and use changes for 2022/23 include higher exports, lower crush and reduced ending stocks compared with last month’s report. Soybean exports are raised 25 million bushels to 2.02 billion based on higher-than-expected shipments through February. Soybean crush is reduced on a small reduction in domestic soybean meal disappearance combined with a higher extraction rate. With higher exports more than offsetting lower crush, ending stocks are reduced 15 million bushels to 210 million.

If realized, the WASDE report indicated, ending stocks would be the lowest in seven years. With relatively strong domestic demand for soybean oil limiting export competitiveness, U.S. soybean oil exports are reduced 200 million pounds to a historically low 500 million. Higher domestic use and reduced production are offsetting, leaving soybean oil stocks unchanged in March.

The U.S. season-average soybean price forecast for 2022/23 is unchanged at $14.30 per bushel. The soybean meal price is forecast at $465 per short ton, up $15. The soybean oil price is reduced 2 cents to 66 cents per pound.