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Global Soybean Production Set to Hit Record High, Driven by Brazil and US Expansion

Global Soybean Production Set to Hit Record High, Driven by Brazil and US Expansion
Source: USDA

Global soybean production is projected to reach an all-time high in the 2024/25 marketing year, fueled by significant area expansion in Brazil and increased plantings in the United States, according to a report published by the USDA's Foreign Agricultural Service (FAS).

The FAS forecasts global soybean production to surge to 422 million tons, representing a substantial 6% increase from the previous year. If realized, this would mark the largest annual percentage increase in soybean production in over a decade.

"Global soybean production in 2024/25 is forecast at a record 422 million tons, up over 6 percent from 2023/24," the report notes. "If realized, soybean production will expand by the largest annual percentage in over a decade, predominantly on area expansion in Brazil and raised plantings in the United States."

Brazil is expected to lead the production surge, with output projected to jump by 15 million tons to a record 169 million tons. The United States is also expected to contribute to the global increase, with higher plantings anticipated in response to strong demand and favorable prices.

The report highlights China's continued dominance as the leading driver of soybean import demand. China's soybean imports are projected to reach 109 million tons, driven by recovering crush volumes and robust demand for vegetable oil.

"Growth in soybean import demand continues to be led by China, as crush has recovered on strong feed and vegetable oil consumption demand," the FAS report notes.

The anticipated surge in global soybean production is expected to lead to softer prices in the 2024/25 marketing year. Global soybean stocks are projected to rise by nearly 17 million tons, with the majority of the growth occurring in major exporting countries, including Brazil, the United States, and Argentina.

However, despite the increase in global supply, demand for soybean meal and oil is expected to remain strong, supporting crush volumes in key producing countries. Global soybean meal consumption is projected to rise by 4%, while global soybean oil production is forecast to grow by 5%.

"With global and exporter stocks rising, global soybean prices are expected to soften in 2024/25," the FAS report concludes. "Global soybean meal consumption is projected to rise 4 percent in 2024/25 on ample supplies and growing demand, with China accounting for nearly one third of that growth."

The USDA's latest soybean outlook suggests a market shifting towards increased supply and potentially softer prices in the coming year. However, the strong demand for soybean meal and oil, particularly from China, will continue to play a crucial role in shaping global soybean trade patterns.