Global soybean prices fall as South American supplies increase, but demand in Ukraine remains strong

Futures for soybeans in the United States continue to fall amid high rates of planting and increased supply from Brazil to the world market, particularly in the United States.

Yesterday on the Chicago stock exchange, the July soybean futures fell 0.7% to 515,9 $/t (-5% for the month), and November – by 0.3% to 459,6 $/t (-5 ,1% for the month).

According to the USDA, as of May 7, soybeans in the United States planted 35% of the planned area compared to 11% last year and 21% on average for 5 years. This means that farmers can significantly increase the area under soybeans in the current season, especially given the too slow sowing of spring wheat.

Analysts expect that in the May report USDA experts will lower the forecast of soybean production for Argentina from 27 to 24.36 mln tonnes and raise for Brazil from 154 to 154.86 mln tonnes, resulting in the ending stocks in 2022/23 MY decrease by 1 mln tonnes to 99 mln tonnes, and the global balance will worsen.

In Ukraine, despite the decline in prices for rapeseed and sunflower to 14000-15000 UAH/t ex-farm, the purchase prices for GMO soybeans remain high at 16700-17800 UAH ex-farm due to the increase in prices for meal from exporters, while oil prices continue to fall. Due to the stable export demand for soybeans, prices in the Danube ports remain at 460-475 USD/t with delivery to Reni or Izmail, while demand prices from European buyers are 400-450 €/t with delivery to the EU.

EU countries for the period 1-7 may increased compared to the previous week soybean imports by 72% to 365,073 tons, and in General since the beginning of the season purchased 10.66 million tons of soybeans, which is 11% lower than the same period last year, – said the European Commission. Almost 46% of the purchased soybeans came from the USA, 33% – from Brazil, 11% – from Ukraine.

According to the forecasts of ANEC experts, Brazil in May will export 12.1 mln tonnes of soybeans, which is 1.8 mln tonnes less than in April, but will exceed 10.3 mln tonnes shipped in May 2022. If the forecast is achieved, the total soybean exports from Brazil in 2023 will reach 49.93 mln tonnes, while in the first 5 months of 2022 it amounted to 45.19 mln tonnes.

The main buyer of Brazilian soybeans is China, which purchased 73% of the volume exported in January-April.

Also, in May, Brazil plans to export 2.2 mln tonnes of soybean meal, up from 1.7 mln tonnes in April and 1.9 mln tonnes in May 2023.

Tags: Ukraine, China, Brazil, EU, prices, soybean, USA, Argentina