Soybean prices remain under pressure from global production growth forecasts

Ahead of tomorrow’s release of the November supply and demand report (WASDE), it continues to improve its forecasts for an increase in global soybean production this season, which increases pressure on prices.

In the November report, FAO experts raised their forecast for global soybean production for 21/22 by 2.2 million tons to 382.3 million tons, which is 16.8 million tons higher than the level of production last season.

According to analyst surveys, the forecast for the soybean harvest in the United States in my 2021/22 in the November USDA report will increase by 0.95 million tons to 122 million tons, which will increase the final reserves in the United States, and also by 1.1 million tons will increase the level of global reserves to 105.6 million tons against 99.2 million tons last season.

Rather bearish forecasts increased pressure on futures and November soybean contracts on the US stock exchange fell 1.4% to 4 438/ton on Friday, losing 3.6% overall over the past week.

Export sales of soybeans from the United States for the week ended October 28 amounted to 1.864 million tons, but total export sales since the beginning of the season are 32.38 million tons, which is 33% less than a year ago due to rather low demand from China, which expects cheaper Brazilian soybeans to arrive.

According to the forecast of the USDA representative office in China, the forecast of soybean imports to China in 2021/22 MG will remain at 101 million tons against 99 million tons in the past.

Heavy rainfall in Brazil, as well as additional rainfall in Argentina, continue to increase the sowing rate and maintain good forecasts for soybean production in South America.

In Ukraine, there is also an increase in pressure on the purchase prices of soybeans with GMOs, as export prices in ports remain at the same level of 505-510 $/t, or 14900-15000 UAH/t for soybeans, processors reduced their prices by another 400-500 UAH/t for the week to the level of 15800-16000 UAH/t with delivery to the plant, not wanting to overpay much especially against the background of low demand for meal and cake.

Prices of export demand for non-GMO soybeans remain at the level of 6 650-680/ton, or UAH 19500-20300/ton with delivery to the port or border against the background of an increase in the cost of delivery and almost no shipments of wagons in the direction of Belarus or Poland.