WASDE preview: Soybean trade expects more of the same

Market analysts expect a further lift in US soybeans end stocks and Brazilian production, in this month’s USDA’s S&D update due Tuesday, while Argentina’s crop is expected to take a further hit, a Reuters survey showed.

US end stocks are expected to receive a boost of about 20 million bushels (7.3 million mt), based on traders’ average expectations of 574 million bushels, after the March report already lifted it 25 million bushels to 555 million bushels.

A further cut in US exports and SME consumption by the US biodiesel industry is expected to offset the cut in intended soybean area, which the USDA reported in last week’s underwhelming prospective plantings report.

It is yet to be seen how much the USDA will factor in the current trade despite between the US and its largest customer, China, keeping the market guessing on the impact on US end stocks.

Some traders and analysts expect end stocks to lift to as much as 625-650 million bushels, which would cause for a further bearish market.

Global view

However, the USDA is expected to keep the market in the same limbo it did last month, with a bearish view on the US S&D, but a rather bullish take on the global market.

Global stocks are expected to be trimmed by over 1 million mt from the March report, based on trader’s average expectations of 92.95 million mt.

Yet market guesses remain far apart keeping a wide range, with lows of 91 million mt to highs of 96 million mt, according to trader and analysts’ expectations.

South America’s supply and demand update is expected to be routine, with Brazil’s soy crop further lifted, with the average trade expectation at 115.25 million mt.

That compares to USDA’s March view of 113 million mt, and Agrural’s latest forecast of 117.9 million mt.

Argentina’s crop, plagued by persistent dry weather this season, will take a further trimming, as average analyst expectations of 41.32 million mt come in below the USDA’s March view of 47 million mt.

However, most analysts and traders remain optimistic and still expect Argentina to produce 40 million mt or above, with only four of 19 questioned analysts foreseeing a crop of 39 million mt or lower.

Earlier this week, the Buenos Aires Grain Exchange (BAGE) cut its Argentina prospect down to a 38 million mt crop, the most pessimistic view so far.