The recent release of the WASDE report has ignited a fierce debate within the industry, with experts scrutinizing the realism of USDA's demand projections and anticipating the possibility of further cuts. Key concerns arise regarding the accuracy and practicality of these forecasts.
Arlan Suderman from StoneX Group expresses skepticism toward USDA's export target, considering it to be overly ambitious and detached from current market dynamics. Suderman also highlights the agency's underestimation of the crush number for soybeans, failing to account for the substantial growth in renewable diesel and sustainable aviation fields, as well as the increasing number of crush facilities.
This strong demand for soybeans might diminish the need for imports from the United States. China has been importing 2 to 3 million metric tons beyond their crush needs monthly since May, and Suderman expects this trend to persist for a few more months, resulting in a significant surplus of 12 million metric tons before U.S. exports commence.
This surplus could provide China with alternative options and bargaining power in terms of pricing and business preferences. While initial reactions characterized the July WASDE report as bearish for grains, Suderman suggests that subsequent analysis revealed a less bearish outlook than initially perceived. Concerning yield projections,