43 It’s Farming. And It’s Better. Better Farming | December 2024 The market has been keenly following the 2024-25 cropping situation in South America. The weather in the key growing regions of Brazil (and Argentina) was extremely dry in September. This created worries and concerns about delayed plantings, and as a result, the managed money funds built some weather risk premiums into grain and oilseed futures creating a “fall” rally. Planting in many regions, including the crop-heavy Mato Grosso, Brazil, was delayed as the soil was bone-dry. Market participants were initially concerned that the drought and heat might last into October and reduce the region’s crop production potential, but the rains and the wet season arrived in October, albeit two weeks later than normal. Normally, November and December are the key weather scare months as they are the key soybean pod filling stage months. Brazil in recent years has continued to expand the country’s crop production base by bringing more area under cultivation at the expense of cutting down their Amazon forest. Increased Chinese investment in the country’s infrastructure, including ports, and ag sector may have aided in boosting production and exports, especially to China. Traders are especially anxious about this year’s Brazilian soybean crop which, according to the United States Department of Agriculture (USDA), is projected to be a monster 169 million metric tons (MMT). That is seven MMT bigger than the prior record from the 2022-23 season and 16 MMT bigger year-on-year. Argentina’s 2024-25 soybean production is projected to be 51 MMT, which is the biggest since 2018-19 and among the country’s top seven biggest soybean production estimates ever. Combined, it would be another record soybean crop from South America on top of a record United States (U.S.) soybean crop with the world swimming in soybean bushels. The U.S. 2024-25 soybean crop is estimated to be a big 121.42 MMT, as of the November USDA World Agricultural Supply and Demand Estimates (WASDE) Crop Report. Statistics Canada projects the Canadian soybean crop to be 7.2 MMT, which would be the third biggest ever, and it is supported by a record Ontario soybean production of 4.3 MMT as we noted in our observations from a recent Better Farming article on the 2024 Great Ontario Yield Tour (#ONYield24). The huge North and South American output expected (that includes record production from Brazil and the U.S. – the top two producers globally) is sharply boosting the global 2024-25 soybean production to a massive new record 425.4 MMT. This is 30.67 MMT, or about eight per cent, larger than the prior record from last year with record global ending stocks at 131.74 MMT. Although the oversupply of soybeans is leading the 2024-25 global oilseed supply outlook, the supply glut does not stop there. The 2024-25 global canola production estimate at 87.44 MMT is the third biggest ever and comes on the back of two record-breaking production years. Although the European canola production estimate has dropped off year-on-year, Statistics Canada projects the 2024-25 Canadian canola production to be 18.98 MMT, which is among the country’s top seven production years. USDA projects 2024-25 global palm oil production at a record 80.179 MMT, which is 2.895 MMT bigger than the prior record from last year, as it is boosted by record Indonesian and Malaysian production (and Asian production, in general). The big 2024-25 oil crops production glut is weighing on all global oil crop values including soybeans, canola, and palm oil, as one affects the other. The burdensome supply outlook is not just an anchor on oilseed prices, but it weighs on the broader grains and oilseeds market as well. Naturally, the big question when we see such a big supply of oil crops is how and where are we going to find a home for all of that production? China is the biggest buyer of soybeans, canola, palm oil, and oil crops in general. The market needs China to remain as the primary demand centre and continue to import large amounts of oil crops. A MOUNTAIN OF GLOBAL OIL CROPS Oversupply of oilseeds weighs on prices. By Moe Agostino & Abhinesh Gopal Moe’s Market Minute North American farmers are likely to cut back on their soybean acreage in 2025-26. Leslie Stewart photo
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