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.

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Wow!

Wow!

Wow!

The global oilseed situation has changed dramatically!

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

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

Wow!

Wow!

Wow!

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Walter Cronin

Walter Cronin

Walter was the Chief Commercial Officer at Green Plains Inc. until August 2021. From August of 2015 until January of 2020 Mr. Cronin served as the Executive Vice President for Commercial Operations. Prior to that, Mr. Cronin was the Chief Investment Officer of Green Plains Asset Management LLC. GPAM is a wholly owned subsidiary of Green Plains Inc.(NASDAQ: GPRE). Mr. Cronin has served in that role since November 2011. Mr. Cronin served as Executive Vice President and trading principal of County Cork Asset Management from April 2010 to November 2011 when it was merged with GPAM. Mr. Cronin acted as a consultant to Bunge Limited (NYSE:BG), a multinational grain trader and oilseed processor, for which he served as a consultant developing trading and risk models for agricultural futures trading from September 2004 through March 2010. From February 1997 through June 2004, Mr. Cronin co-managed the Crush, Fundamental, and Ag-Spread programs at Kottke Associates, a commodity trading advisor based in Chicago. Prior to that time, Mr. Cronin was a member of the Chicago Board of Trade and managed the commercial grain operations for RJ O’Brien Futures from November 1994 through January 1997. From August 1989 until October 1994, Mr. Cronin traded grains and managed grain facilities in multiple locations for Continental Grain Company, and from February 1988 through May 1989, Mr. Cronin worked for the Henning and Krajewski clearing firm at the Chicago Board of Trade. Mr. Cronin served as a Peace Corps volunteer in Kenya from September 1985 through December 1987. Mr. Cronin received a BA from the University of Santa Clara in 1985

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