USDA Shocks Soybean Market

Insight Focus

Final 2023 planted acreage and stocks information released.
Data was outside range of analyst estimates.
Soybeans futures spreads soar.

This is a VERY brief note following USDA’s just released shocking final 2023 planted acreage and quarter end grain and oilseed stocks (US inventory) information. The USDA in effect (rolled a surprise grenade into the global oilseed trading arena) issued soybean statistics that caught ALL credible analysts completely by surprise. How do I know that? News media traditionally issues ranges of analysts’ estimates in advance of major USDA reports. Today’s USDA statistics were not in any of the analysts’ ranges; not even close. Soybean oil futures spreads, specifically the December 2023 versus the July 2024 spread, the middle part of the curve that in my opinion represents the DEMAND bull market in agricultural markets (and my oh my has the USDA just changed the equation to a SUPPLY bull market) coming from the renewable diesel industry’s outsized demand for vegetable oil feedstocks, have soared to new highs.

Source: Refinitiv Eikon

Wow!

The global oilseed situation has changed dramatically!

And Cargill’s delivered soybean oil inventory? Disappearing, slowly.

RD 2.0 is unfolding and now the USDA has changed the equation. Dramatically.

Wow!

Walter Cronin

Walter Cronin served as Chief Commercial Officer at Green Plains Inc. until August 2021, previously holding roles as Executive VP for Commercial Operations and Chief Investment Officer at its subsidiary, Green Plains Asset Management LLC. He worked with County Cork Asset Management and consulted for Bunge Limited, developing trading and risk models. Walter co-managed programs at Kottke Associates, managed grain operations for RJ O’Brien Futures, traded grains for Continental Grain Company, and worked for Henning and Krajewski at the Chicago Board of Trade. A former Peace Corps volunteer in Kenya, he holds a BA from the University of Santa Clara.