Soybean and soybean oil prices are rising amid another cut in Argentina’s crop forecasts

The USDA representative in Argentina lowered the 2022/23 soybean production forecast to 23.9 million tonnes, which would be a 24-year low, as yields will be the lowest in 50 years. The import forecast was raised to 11 million tons, but the processing forecast was lowered to 29.5 million tons. We will remind that in the April USDA report, soybean production was estimated at 27 million tons, so the balance will worsen again in May.

According to the Grain Exchange of Buenos Aires, as of April 12, soybeans in Argentina were harvested on 4.3% of the area. The yield is very heterogeneous, and averages only 1.44 t/ha. As a result of the lack of moisture and high temperatures, 65% of soybean crops were in poor or very poor condition on this date, compared to 15% last year on this date.

Argentina plans to import large volumes of soybeans to load its processing facilities, but that could be hampered by logistical problems in Brazil, where ports are overloaded with export shipments. U.S. refiners will benefit from shrinking supplies of soybean oil and meal from Argentina as they ramp up supplies.

According to the US National Oilseed Processors Association (NOPA), in March, soybean processing volumes increased by 12.3% compared to February, from 4.5 million tons to a 15-month high of 5.06 million tons.

May soybean futures on the Chicago Stock Exchange rose 1.5% during the week to the highest level since March at $558/t after falling 6-7% in March. At the same time, soybean meal is traded at $516/t, which is 7% lower than the level at the beginning of March.

ANEC analysts expect Brazilian soybean exports to fall to 13.8 million tonnes in April, down from 15.2 million tonnes in March, which would still exceed 11.4 million due to delays in vessel loading amid high supply volumes and logistical issues. tons in April 2022, and the export of soybean meal will increase compared to March from 1.8 to 1.9 million tons.

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