Equity Analysis /

Thailand: Agro & Food - Record Brazilian and global production seen for 2022/23

  • 2022/23 US SB harvest ended up ahead of last year

  • USDA’s Nov report—slightly negative due to higher global stocks

  • Deeper negative SBM and lower total soy spread in Nov

Bualuang Securities
30 November 2022

We regard the USDA Nov report as a slight negative due to higher US and global soybean (SB) stocks and the record Brazilian and global output for 2022/23. As La Niña probability dives in 2H23, soybean is a bad call in 2023. A HOLD for TVO stands for a good dividend yield.   

2022/23 US SB harvest ended up ahead of last year

Based on the USDA’s Crop Progress report of Nov 14, 2022 (which was the last update on the US SB crop progress), 96% of total US SB acreage has been harvested, or 5ppt ahead of last year and the 5-year mean (91%). Although the harvest got a slow to start, the favorable weather has contributed to much of the progress of this year’s SB crop. The dry weather with little or no precipitation during early-to-mid Nov which dominated large sections of the Midwest prompted the rapid harvesting pace seen in Nov. Despite the cold and dry weather with the snow cover hampering the final SB harvest in the Midwest during Nov 13-19 due to the La Niña peak, it hasn’t adversely impacted much of the harvest which is nearly completed. Overall, we regard the condition of this US SB crop as fairly good.