Equity Analysis /
Thailand

Thai Vegetable Oil PCL: Thailand: Agro&Food-Record SB production for US, Brazil and worldwide in 2022/23

  • Record-breaking SB output for US, Brazil and the world in 2022/23

  • Further La Niña probability upgrade in 2H22

  • Delayed 2022/23 US planting due to the wet and cool weather

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
30 May 2022

Although there are currently some positive factors underpinning the global soybean (SB) price including further upgrades of La Niña probability in 2H22 and the recent US SB planting delay in May due to the excessively wet and cool weather during the start of the season, we don’t think these will alter the big picture of the huge expansion of 2022/23 US and global SB production due to record-high planted areas and a jump in 2022/23 US and global SB stocks. Our HOLD rating stands on TVO for a 6-7% dividend yield.

Record-breaking SB output for US, Brazil and the world in 2022/23

In its May 12 World Agricultural Supply and Demand Estimates report, USDA released its first projections for the 2022/23 marketing year. The US, Brazil and global output are to set new records. Due to the record 2022/23 US planted acreage of 91m acres and the slightly improved US yields, the 2022/23 US SB output is forecast to reach the record of 4.64bn bushels, up 4.6% YoY, bringing the US stocks to 310m bushels, up 75m bushels or 32% YoY, or the highest since 2020/21.