52 Our Advertisers Appreciate Your Business Better Farming | March 2024 The North American oilseeds industry, including soybeans and canola, is reportedly faced with burgeoning global supply expectations and question marks over demand. The United States Department of Agriculture (USDA) dealt the grains and oilseed market a rude surprise in its monthly crop report in January 2024, when it raised the United States (U.S.) 2023/2024 soybean crop yield estimate above 50 bushels per acre (bpa) to 50.6 bpa and the U.S. corn crop yield estimate to a new record of 177.3 bpa, which was the biggest shock. Both these estimates were way above what the market was expecting and caused U.S. production, U.S. ending stocks and global ending stocks to increase. These bearish numbers, at a time when momentum was already down, caused a break below support for soybeans and corn. The 2023 U.S. cropping season had a drought in May/June, followed by timely rains in July and another drought in August/September. The U.S., though, had better-than-expected yields despite the dry weather. Record corn crops were harvested in Indiana, Ohio, South Carolina and Utah, with record soybeans yields in Indiana, Ohio, South Carolina, Tennessee, Arkansas and Mississippi. The Canadian 2023/2024 canola production rebounded year-on-year (Y/Y) to 18.328 million metric tons (MMT). Although the oilseeds complex as a whole has been in a general downtrend for over a year and a half, in early 2024, canola futures dropped to their lowest in over three years. As Western Canadian farmers finalize their 2024 acreage decisions, canola acres could drop due to the lowest prices since 2020 and the possibility of another drought in 2024. Globally, the 2023/2024 South American cropping season got off to a mixed start with North and Central Brazil getting hit with drought, which also led to the drying up of the Amazon River, while the south of the country was hit with heavy rains. Argentina has had fair weather for the most part. Although USDA and Conab (Brazil’s agriculture authority) started out high with their soybean production estimates for Brazil’s soybean crop (they are known to be very slow to adjust) and remained above 155 MMT in January 2024, estimates from private relevant analysts have continued to cut production estimates due to disappointing early yields. The range of estimates in January remained wide at 130 to 161 MMT, with an average near 145 MMT. This is down by about 18 to 20 MMT from where we started (163 to 165 MMT) and down from last year’s 160 MMT. The dry parts of Brazil did receive better rains later in the season, but the Brazil soybean production potential got foggier with early crops in the north unlikely to benefit from the moisture, as it came late for them. Moe’s Market Minute BIG CROPS, POOR DEMAND, LOWER PRICES Grain & oilseed markets have lacked volume since last year. By Moe Agostino & Abhinesh Gopal Tracy Miller photo Canola acres could drop due to low prices and the possibility of a 2024 drought.
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